Time to Fix Your Credit?
- By Stuart Hunter
- Published 03/27/2009
- Finance
- Unrated
Stuart Hunter
Providing credit repair services since 1991, Lexington Law has helped over 500,000 clients legally take on their credit. Last year alone, Lexington Law helped clients remove over 600,000 negative items from their credit reports.
View all articles by Stuart HunterTime to Fix Your Credit Rating?
As is usually the case, even things as concerning as the current credit crunch have a silver lining. In the case of the credit crisis, the silver lining is that the cost of big ticket items are dropping. Plummeting interest rates with already lower prices work together to make right now one of the premier times in decades to buy a home, refinance your existing home, or get a new automobile.
There is, however, a catch.
Not everybody can benefit from this opportunity. Credit is more difficult to come by, hence the term "credit crunch". After years of irresponsible lending practices and an unprecedented number of defaulted loans and foreclosures, lenders have had to become more conservative in their lending practices. Today, they are only able to extend credit to the lowest risk consumers.
Lenders largely determine credit risk by looking at your credit score. A poor credit rating tells lenders that you cannot be counted on to repay your debts on time and maybe not at all. As a result lenders will deny credit to people they feel are too high risk, and charge higher interest rates to those who are a moderate credit risk to make sure they can make money even if a small percentage of those
people are not able to repay the loan.
Today, lenders threshold for credit risk is much lower than it has been in previous years. A credit score in excess of 750 is now required by many lenders to get approved for loans with the best interest rate and the best terms. A credit score lower than 750, and you have to pay extra. Too far below, and you run the risk of being denied for credit altogether.
But what happens if your credit rating says you are a poor credit risk, even when you really aren't?
Credit errors, flawed scoring algorithms, and irrelevant credit information combine to give many people credit scores that are not representative of their actual credit worthiness. They are responsible consumers who can be counted on to pay their bills, but their credit reports tell a different tale. For people in this situation, fixing their credit may be the best option for getting the credit rating they deserve.
So if your credit score is holding you back, don't just sit idly by and wait for things to improve. You have the right to a fair and accurate credit score and there are things you can do to legally fix your credit. Take action today and you may even be able to benefit from the credit crisis.
There is, however, a catch.
Not everybody can benefit from this opportunity. Credit is more difficult to come by, hence the term "credit crunch". After years of irresponsible lending practices and an unprecedented number of defaulted loans and foreclosures, lenders have had to become more conservative in their lending practices. Today, they are only able to extend credit to the lowest risk consumers.
Lenders largely determine credit risk by looking at your credit score. A poor credit rating tells lenders that you cannot be counted on to repay your debts on time and maybe not at all. As a result lenders will deny credit to people they feel are too high risk, and charge higher interest rates to those who are a moderate credit risk to make sure they can make money even if a small percentage of those
Today, lenders threshold for credit risk is much lower than it has been in previous years. A credit score in excess of 750 is now required by many lenders to get approved for loans with the best interest rate and the best terms. A credit score lower than 750, and you have to pay extra. Too far below, and you run the risk of being denied for credit altogether.
But what happens if your credit rating says you are a poor credit risk, even when you really aren't?
Credit errors, flawed scoring algorithms, and irrelevant credit information combine to give many people credit scores that are not representative of their actual credit worthiness. They are responsible consumers who can be counted on to pay their bills, but their credit reports tell a different tale. For people in this situation, fixing their credit may be the best option for getting the credit rating they deserve.
So if your credit score is holding you back, don't just sit idly by and wait for things to improve. You have the right to a fair and accurate credit score and there are things you can do to legally fix your credit. Take action today and you may even be able to benefit from the credit crisis.