Restore Your Credit Rating Through Debt Solution

Debt solution credit agencies and your credit ratings

In a credit related society such as the one we're living in today, having a good credit is very important. Whether it's purchasing a new vehicle, or requesting finance for a new home, or even applying for a conventional loan – it's your credit status and ratings that count and determine exactly how much credit's going to be made available for you. At times individuals having lesser academic qualifications or simple job profiles end up getting good credit as compared to their "educated" colleagues, simply because they've taken care of their credit ratings and done the "right" thing at the "right" time. A couple of "defaulted" payments can damage your credit ratings substantially. And that's going to affect you sometime, somewhere and someplace. That's where "debt solutions" and "debt solution programs" come in. If you're credit's taken a beating, these programs help to restore your credit status back to "normal".

It's important to know that three major reporting agencies - Equifax, Experian, and TransUnion - provide your credit information associated with your account. The Fair Credit Reporting Act, also referred to as the FCRA, makes it mandatory for these agencies to make your credit report available to you - at no cost - once in every twelve months. These free reports can be used for evaluating your credit ratings, and you can do it yourself, if it's possible to interpret your liability status and condition.

Probable causes of bad credit ratings

There are several ways by which you can "damage" your credit ratings. The following are a few pointers generally associated with a large number of bad credit ratings:

You do not pay off your debts on time, or are late in paying

Paying your monthly dues on time is important since it directly affects your account transaction history. This history in turn affects your credit ratings. "Defaulted" payments can lead to a dark blot on your credit records and affect you for a long time, since credit related history takes time to "go away" and can be eliminated only by subsequent proper payments and creditor approval.

Debt to income ratio

The ratio of your annual cash inflow and your "borrowings" can affect your credit status up to a certain extent. If you're earning $50,000/- per annum and your borrowings indicate you've a liability of $40,000/- per annum, you're status is judged to be "high risk" by credit companies, even if you're monthly payments are on time and you haven't defaulted in the past.

Distant past history of bad credit

You're past counts. At least the past related to your account and credit. If you are regular in your payments and have fulfilled your commitments, it's still possible to have a bad credit status as your "past" exhibits a bad credit status.

Too many credit cards or loans

Each debt or a loan is interpreted as a liability in terms of credit ratings. More the number of loans, the greater are you're liabilities to "redeem" your debts, and this condition works against you in the long run. Credit card debt consolidation company understand greater the liability, greater are the chances of defaulting upon the payments. Statistics and figures can work against you.

Unconventional source of income

Your source of income can be a surprising but possible cause for a bad credit rating. Ratings are programs based upon general guidelines since they cater to mass number of individuals. And these programs have certain parameters attached to them. These parameters also include your source of income. If you're doing a simple 9 to 5 or have your own proprietorship or firm, chances are this won't affect you. But if you're method of income is not included in these parameters, it is considered as "abnormal" or "not standard" and can reduce your ratings. Thus the normal credit scoring techniques make you look like a bad bet.

How to repair your credit ratings

If you are not aware about your credit ratings, it's possible to obtain the free credit reports as mentioned above. It's an activity that's often overlooked, but of great importance - your credit future is at stake. Taking necessary steps can help prevent financial pitfalls created by lack off, or inaccurate credit information. Debt solutions companies can help you restore you're credit. The company employs a team of "debt" experts who have the experience to guide you with their advice and experience. Each client is appointed one "representative" so you one-on-one conferences and representation. There are also other experts can also negotiate on your behalf with the credit card debt elimination companies and improve your credit ratings through their debt solution programs or debt settlement programs.