Are you being turned down for mortgages, credit cards and car loans? Does the thought of a credit application make you shiver? Do you keep asking yourself why?
A simple answer is that your credit report contains negative credit information. The most common negative items , in order of severity, will be discussed in this article.
When you find yourself sinking in debt with no possible life vest available to you, bankruptcy is the only solution available. Bankruptcy law is complex and you should seek legal advice. Basically, the court declares that you are unable to repay the money that you owe .Under Chapter 7 your debts are deemed to be zero. You are not held responsible for any payment.
Bankruptcy stays on your credit report for 10 years. I t is the most severe negative item that you can have on your credit report. It will drastically affect your credit score. Only time can heal this. No one can legally remove a bankruptcy from your credit report.
You buy a house. You put a down payment and finance the rest of the purchase with a mortgage. You have monthly payments to make. If you fall behind in your payments, the mortgage company will take you to court. They will have you removed from your home and take possession of it.
Foreclosure stays on your credit report for 7 years. It is difficult to remove from your credit report because the credit reporting agencies can easily verify its authenticity. It will reduce your credit score.
You purchase big ticket items like a care and finance the purchase. You agree to make scheduled payments to the seller or the lender who has financed the purchase. If your account becomes past due or you fail to make payments, the seller or lender can repossess the financed property. They have a secured interest in the item you purchased.
This negative will remain on your credit report for 7 years and lower your credit score.
A creditor gives up on collecting the amount that you owe. He doesn't believe that he will ever collect. He writes the account off his books and no longer shows it as a receivable. Your account is sold to a collection agency.
This will remain on your credit report for 7 years. Paying it won't make much of a difference because the charge off will still remain on your credit report. It will be shown as a paid charge off and still lower your credit score.
Payments received after due dates are reported to credit bureaus by lenders and creditors. If you remain current on all your payments, a history of old late payments will not have a major impact on your credit score.
Do not fall prey to credit repair scams. No one can legally remove verifiable negative items such as bankruptcy, foreclosure and repossessions.
The only way to negate the impact of negative items on your credit report is to start a credit repair process. Pay your bills on time and don't spend more than you make. Keep your credit balances low and don't apply to every credit card that comes your way.