Frequently Asked Questions

What does a credit repair company do?
A credit repair company can quickly and effectively negotiate negative, incorrect items on your credit report. A common misconception about credit repair companies is that you can pay them to remove anything negative from your credit report. In reality, no company can legally remove any credit items that are accurately reported. If a creditor fails to provide proof or verification of the reporting, it can be removed, otherwise, it stays. Statistics show that an alarming amount of people have inaccurate information on their credit report - errors that can be costly and prevent all kinds of credit options. These can take months to dispute on your own and many people lack the know how. Credit repair companies can battle errors in your credit report in a manner that is timely and efficient.

Can I fix my own credit?
You always have the option to dispute your own credit report. This requires sending documentation, writing dispute letters, and a good understanding of the errors to the three main credit bureaus. This can be done simply with the assistance of a credit repair kit, which contains instructions and preformatted letters to send to the bureaus. Some companies sell these kits, at Credit MD you can get one free!

Where can I get a copy of my credit report?
The easiest way to get a credit report is to purchase one online. This way, you can get reports from all three main credit bureaus-Equifax, Experian and TransUnion side by side, and you get it instantly. Your credit report will show you what each creditor and credit bureau is reporting about you, and provide your credit score. There will usually be a charge for this. If you have recently been denied credit, you can also send a letter of denial to the credit bureau the company used and ask that they mail you a copy of your credit report. This is free, but it can be time consuming.

I have bad credit. What can I do?
The longer you wait, the more dire the situation becomes. When you act early, there are more options available. If you have bad credit because of too much debt, a debt consolidation program may be advisable. It can make your payments more affordable, and reduce hundreds of dollars in interest. Check your credit report for errors, which statistics have revealed to be present in more than half of the studied reports. By disputing these errors yourself, or through a credit repair company, you can dramatically improve your credit. The best thing you can do for yourself is to start building good credit. You can do this by paying your bills on time. If you have recently had a bankruptcy, have no debt, and cannot get approved for anything new, try a secured credit card. Pick one that reports to all three credit bureaus every month.

I have no credit. Where do I start?
Getting that first credit card can sometimes be tough. There are various student credit card programs available. If you are not a student, you can try your luck at a small store in the mall. If you still have no luck, the best option is to apply for a secured credit card. Good ones will report to all three credit bureaus each month-make sure you check to see if it does. This will allow you to build credit every month, even though it's more like having a debit card than a credit card. Once you have built a little credit, you will start getting offers and approvals for unsecured products as well.

How can I prevent credit fraud and identity theft?
Identity theft and credit fraud are real, and they are becoming an increasingly common problem in the U.S. today. People can have their financial lives destroyed because of fraud committed in their names. The best way to prevent this is to sign up for a credit monitoring service. For a low monthly fee, they will alert you of any suspicious activity on your account, let you view all recent activity on your credit report, and allow you to stay on top of what is being reported about you. If you do not want to sign up for a credit monitoring service, you can also regularly order copies of your credit report to make sure all of the information on it is accurate.

Can I get a loan with bad credit?
The financial world is definitely changing to meet the needs of all credit types. Today a variety of credit options are available, even to those with bad credit. There are personal loan programs that specialize in bad credit. A good way to check before applying is to call the company and ask them about their minimum credit requirements. You can check your credit score online. There are also many home loan programs that can help those with bad credit get various loan programs at good interest rates.

What is debt consolidation?
Debt consolidation is probably the most effective way to reduce and restructure your debt. You may wonder how another loan can possibly reduce your debt - but the way a debt consolidation loan works is different. Your debt consolidation plan will pay off all of your current debt. This will immediately help your credit by showing all of your creditors paid in full. Now, instead of having many small loans, you will have a single loan with one monthly payment. The new loan will be at a lower interest rate than the combined rates your were paying previously - thereby saving you hundreds or even thousands of dollars. It also streamlines your debt into a much more manageable payment. There are many affordable payment plans available to fit your budget.

What is debt settlement?
Debt settlement can prevent bankruptcy. It is an ideal financial solution for those who are deeply in debt and their accounts are delinquent or charged off. While debt settlement can dramatically reduce your monthly payments and amount of debt, it is not recommended unless you are really facing few alternatives short of bankruptcy. The reason for this is that your debt settlement case workers will negotiate with your creditors to reduce your balances as much as possible. While your credit report will reflect these accounts as legally paid off, they will reflect that the original amount was not paid, and this will hurt your credit to some extent. However, this damage is far less than that of a bankruptcy, and will make it easy for you to repair your credit again. Once your debt has been negotiated to a minimum, you will be given a new loan that will pay off all your current creditors. You will then have one loan and one monthly payment.

What is the difference between debt consolidation and debt settlement?
Debt settlement and debt consolidation are similar in that they both pay off your current creditors and streamline your unsecured debt into one monthly payment. The key difference is that debt consolidation pays off your current debt in full. Your main savings can be realized with an improved interest rate, and you can benefit from a more affordable payment plan. With debt settlement, creditors are negotiated with to get a lower balance. This is effective for severely delinquent or charged off accounts. While these will also be legally paid off, they reflect differently on your credit report because they were not paid for the original amount. If you can afford it, debt consolidation is a much better financial option for your credit. But if you are facing bankruptcy and are severely delinquent already, debt settlement is a more drastic measure that can help you prevent bankruptcy and improve your financial situation.

My business is in trouble. What can I do?
If your business is undergoing a slow time, paying bills and overhead can get costly and even put you behind. Fortunately, you can avoid business bankruptcy with professional help. The sooner you do this, the more likely it will be that you can get out of business debt. Businesses can qualify for debt consolidation programs that lower interest rates, lower monthly payments, and restructure debt to make an affordable monthly payment that can help your business survive.

What is a home equity loan?
The equity in your home is a valuable asset you may not be aware of. Your home has a particular value. This could be what you bought it for, but in most instances it will be higher because home values rise. Your home could have appreciated tens of thousands of dollars within just a few years! If you have no mortgage or liens on your house, the full value of your home is its equity. But in most cases, people will have a mortgage on their home. So their equity is the value of the home minus the amount owed on their mortgage. Each time they make their mortgage payment, they gain a little more equity in their home. You can get a cash loan against the equity in your home. Since this is considered a secured loan, you can get excellent interest rates that are better than those of personal loan programs. Home equity loans can be used for anything, from home improvements to taking a vacation.

What kind of home loan options are there?
As a homeowner, you have a valuable asset that enables you to gain many different types of financial products and home loan options. The most common home loan is obviously a mortgage. But even if you already have one, you can qualify for other programs. You can get a second mortgage or home equity loan at a low interest rate and free up extra cash that way. Often, you will get a lower interest rates just for being a homeowner.

What is a cash advance or payday loan?
This is the quickest way to get some emergency cash when you need it fast. It is probably also your best option for a small loan amount. Even if you have very bad or no credit, you can be approved because there is often no credit check involved! You will need stable credit history and a check stub to apply. You will be given somewhere between a pay period and a month to repay the loan. You can also get the money in as little as 72 hours. This is a great way to get extra cash for emergencies or unexpected situations until your next payday.

I need $50 - $1000. What are my options?
For such a small amount of money, there are two options that would fit you best. If you need the money in a hurry and can pay it back very quickly, then a payday loan or cash advance is a good choice. You can get the money within 48 hours and it is deposited right into your bank account. There is no credit check, you just need stable job history to be approved. The downside is that you have to be able to pay it back within a couple of weeks. For a more long term financing solution, you should try to get a small personal loan. Some companies may have a minimum of $3000 or more. You can always borrow the additional amount and pay it back if you don't need it. If you need the cash for a specific purpose, you can consider getting a credit card and financing the purchase that way.

I need $1,000 - $15,000. What are my options?
For this amount of money, you have a few options. The most popular one is probably a personal loan. These are unsecured loans that are obtained on credit alone. But don't let this discourage you if you have bad credit - today there are a lot of bad credit personal loan programs too. The rates on these are higher than on a secured loan, but they generally have no pre payment penalty, are fast and easy to obtain, and can be used for anything. If you want a lower rate and you are a home owner, you can probably qualify for a secured home loan program also. Home equity lines are a very popular way of getting some extra cash. You can even use a high limit credit card for specific purposes. These are similar to personal loans in their payment plans and benefits.

I need $15,000 or more. What are my options?
A personal loan is still an option for you if you need a large sum of money, but getting approved becomes more difficult, especially if you don't have the best credit. Your best option is probably a secured loan-and for this you will need to be a homeowner. There are excellent home loan programs that can free up large amounts of extra cash at great interest rates. Even if you think you don't have equity in your home, you may be surprised-often home values appreciate more than you realize.

Can I get an unsecured business loan?
The simple answer is yes. Not so long ago, getting a business loan without collateral was a very difficult process. Today, prospective business owners have many more options. They can get business financing even if no collateral is involved. Many online finance companies offer special programs for business owners.