Bankruptcy may not be the problem

Bankruptcy is the most detrimental factor for an individual’s credit record. You may become unable to pay back your dues and as a result the credit score further goes downhill. The marks of bankruptcy remain with credit reports for ten years. Fighting back is a difficult process but not impossible. It becomes harder to convince a creditor for further credit as lending money to a bankrupt person involves high risk. Creditors find incredibly low credit score until it is re-scored. Few careful steps must be taken to rebuild a good credit score. The “know how’s” for getting credit is simple and significantly helps people who pass through the worst part of life. Bankruptcy is a devastating blow to your credit history but nothing in credit is forever as the blemish sticks for only ten years. Effects on credit score can start to diminish just after the bankruptcy case is discharged.

Positive outlook helps to develop positive thinking. It is good to look at the positive sides instead of taking stress. After bankruptcy you are allowed to make a fresh start. A person should always consult with the Attorney, he is the best guide. After bankruptcy discharge, it’s the time to reinstate the credit scores. There are several easy means of recovery. A perfect budget for monthly expenses should be planned and no extra credit should be taken to uplift lifestyle. There are many bankruptcy friendly creditors, you can go to them and find out the best credit option. There are certain credit cards which only offer credit after repayment of the past credits; these plastic cards are tailored to prevent overspending. Direct debit from savings account or automated payment system enables timely payment of the dues; this is the right way to avoid any debts. You can directly write to the Credit Reporting Agencies (CRA’S) and explain your exact conditions; this can help in rebuilding a good credit score in future. An auto loan helps in rebuilding credit but you have to be well prepared for the nose bleeding rate at first, in the later stage with regular repayment of installments you will get an easier installment option.

Effective planning can help to remove the mental agonies and anxieties. Light and regular use of credit cards considerably helps but overspending can be dangerous. Bankruptcy is not just a financial state; it leads to mental trauma as well. A perfect way to fight bankruptcy is to develop a regular payment habit. After your bankruptcy case discharge, creditors will definitely offer some solicitations. They may offer credit cards; auto loan and home loans and all these immensely help in reinstating a better credit score. With proper planning, fund management and regular checking of credit report, the effect of bankruptcy slowly diminishes after three to four years.

Manage your errors and disputes yourself

Conscious effort and effective steps significantly help in getting the right credit score. If you are left with a bad credit report, it’s not the time to worry but right opportunity for reconsolidation. Credit problems, no matter how erroneous it is, it can be solved. It seems to be a daunting task but proper planning can leave you with a smile. Often it has been noticed that due to faulty credit reports, individuals suffer a setback. Prompt steps can remove the unwanted harassment. All three credit bureaus offer online dispute resolution as it is a serious matter. Toll free telephone numbers are also provided for better assistance. When Social Security Number of a person coincides with that of someone else, credit report will be totally different. Credit reports without report numbers are also another problem. Often due to miscommunication from the creditor’s part, a detrimental report is generated. Credit bureaus, for maintaining their repute want to provide reports as accurate as possible. Any disputes regarding credit information are given high priority.

Consumers should be more aware about credit reports. It is very important and essential to keep all letters and records properly. The creditor, the debtor, the credit repair agency may violate the law but whenever you produce evidences from your end, things will be different. With proper support of evidences, one can sue the law violating agencies. Without proper documents and proofs nothing detrimental is possible. Hired lawyer cannot proceed with any case with lack of supporting evidences. A statement with correct description of the inaccuracy should be first sent to the agencies. Resolution over the telephone is not recommended, privacy and confidentiality are highly important. Correspondence by certified mail is the best way to keep proof of the sent letter. To avoid further complications photocopies of all documents must be attached to the letter. No original document should be sent along with the mails. If the problem persists about personal information, a copy of driver’s license or utility bill should be added. This resolves the problem at the earliest as the creditors will be asked to confirm the personal details.

Once the personal details are clarified, the whole matter is over. Usually small dispute resolution involves less time, and a free copy of the new changed report is sent to the consumer. Besides corresponding with the Credit Reporting agencies, creditors can be pursued. The credit bureau re checks with the error and once the creditors remove the incorrect information, the process gets half done. Often the credit agencies return almost a same report, under such circumstances, re investigation should be initiated.

Certain underlying causes have effects on credit reports. Bankruptcies remain for ten years. Several instances proved that previous dues are brought forward. Special requests may be made to the creditors for removing the past dues. Credit worthiness is proportional to the credit score and getting a proper score in a crucial factor. Errors in credit report hurts your borrowing abilities, periodically credit report check helps in avoiding sudden confusion. Still, it may be summed up that proper persuasion and follow-ups yield desired result.

Equal and unequal consumer credit opportunities:

Consumer credit and its necessity:

Every individual requires credit for better lifestyle, purchasing a house, starting a business, re modeling an existing home etc. as all these depends upon credit. The Equal Credit Opportunity Act facilitates consumers to enjoy equal opportunities for obtaining credit; but the whole thing depends upon existing debt, credit history, income, creditworthiness, expenses etc. While dealing with varied creditors like credit card companies, credit unions , retail and departmental stores, financial institutions like banks and small loan companies, it has been revealed many times equal opportunity gets distorted. The law protects every consumer to deal with the creditors whenever any malpractice crops up.

Disparity: As it is

The FRB Boston study highlighted the disparity among the mortgage lenders in dispatching loans to the consumers. This is utter violation to the law; again many instances are found where the consumers receive unequal treatment. Discrimination within the whites and the minorities popped up in transactions of mortgage lenders are now considered suspect under Fair Lending Laws.
Banking regulators are investigating their behavior. Data, highlighting unlawful disparity will exert tremendous pressure upon Federal Banking regulators and US Department of Housing and Loan. This indeed hampers the credit scores considerably.

As equal consumer opportunity distorted

In recent past, Chicago witnessed a strong correlation between minorities and mortgage discrimination. The minorities even with fair enough credit score were refused to obtain credit- this further lead to unfriendly relationship among the neighbors. Census tracked during 1990 proves more than 50% disapprovals comprised the minorities. Title VIII of the Civil Rights Act of 1968 and the Equal Credit Opportunity Act of 1976, being combined, prohibit discrimination against mortgage applicants. Statutory Laws are prominent over the years but hardly steps were taken to suppress disparity in behavior of the lenders. Though, it may be said that lack of publicity of these data was the major cause for lack of actions. Moreover, loans by credit organizations may affect credit score. Mortgage lending rate is comparatively lower in case of African and Latin neighborhoods compared to white neighborhoods. Residents of minor neighborhoods do not enjoy equal opportunity like those of white neighborhoods. The Equal Credit Opportunity Act ensures a person if discriminated can check it with The Sate Attorney General. Whenever a consumer proves in a court any discrimination from the agency’s end, the court fees are totally reimbursed and compensated. Joining with other class action suite provides punitive damages for the group up to $500,000. People should come forward with more awareness about legal procedures and against undue discrimination. Rejection by several credit organizations results in poor credit report. This leads to further trouble and confusion regarding future financial conditions. Re-scoring is truly difficult and involves risk.

Who is the final Judge?

Federal law attempts to prevent discrimination on Consumer Finance for better practice of equal consumer credit opportunity. US Civil Rights are highly in practice and properly protected, residents should play a proactive part in preservation of the rights. After the Los Angeles riots, several press highlighted discrimination and the true scene; unbiased contribution from the Fourth Estate was praiseworthy. Still the victims have to carry out the final countdown to supplement inequality in consumer credit.