Time to Fix Your Credit?

As is usually the case, even situations as troubling as the current credit crunch have a silver lining. In the case of the credit crunch, the lining is that the cost of large purchases are dropping. Plummeting interest rates with already lower asking prices work together to make right now one of the best times in recent history to purchase a home, refinance your existing home, or get a new car.

But there is a catch.

Not everyone can benefit from this great opportunity. Credit is harder to come by, hence the term "credit crunch". After years of reckless lending and an unprecedented number of defaulted loans and foreclosures, lenders have been forced to be much more conservative in their lending practices. They are only able to extend credit to the least risky consumers.

Lenders largely determine credit risk by looking at your credit score. A bad credit score 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 of a credit risk, and charge higher interest rates to those who are an average risk to ensure they can still turn a profit even if a small percentage of those people are not able to repay the loan.

Today, lenders tolerance for credit risk is far lower than in the past. A credit score in excess of 750 is now required in many cases to get approved for a loan with the best interest rate and the best terms. Anything lower than that, and you have to pay extra. Too far below that and you run the risk of not being approved for loans at all.

But what happens if your credit report says you are a high credit risk, even when you aren't?

Credit reporting errors, flawed scoring models, and irrelevant negative credit information combine to give many people credit scores that are not indicative of their actual credit worthiness. They are dependable consumers who can be counted on to pay their bills, but their credit scores tell a different tale. For people in this situation, fixing their credit score may be the best option for getting the credit rating they deserve.

So if your credit is holding you back, don't just sit back and wait for it to get better. You have the right to a fair and accurate credit score and there are steps you can take to legally fix your credit. Take action today and you may even be able to benefit from the credit crisis.

Credit Repair Thoughts: http://www.creditrepairthoughts.org

Fix your credit reports on your own or with the help of a reputable credit correction company. Since 1991, Lexington Law has been helping people legally dispute the questionable negative items in their credit reports that are giving lenders an unfair impression of their true credit worthiness.

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