Credit Report Advice

Bills are on everybody’s mind. Paying bills is an inevitable and sometimes unpleasant fact of life; however, not paying bills can create an even bigger problem. If you are experiencing or have experienced significant difficulties paying your debts, you know that the situation is a personal catastrophe. Recovery in such circumstances may take years, but there are some steps you can take to ease the restoration of an acceptable credit rating.

1. Contact your creditors and your credit union. Be up-front about your problem and try to negotiate a payment schedule that is acceptable to you and your creditors. If you show a good-faith willingness to repay your debts, most of the time you will find companies willing to assist you.
2. Bankruptcy. Although declaring bankruptcy may be unavoidable under certain circumstances – catastrophic illness or medical expenses, for example – it should be your last resort. Ultimately, declaring bankruptcy can slow credit rebuilding much more than slowly paying off bills. And, bankruptcy remains on your credit report for 10 years and is a court action that remains on public records forever.
3. Secured loans and credit cards. One way to rebuild credit following a period of bill-paying problems is a secured loan or a credit card. “Secured” simply means that your savings are being held in a special account as collateral for the line of credit. This money will be returned to you once the debt is paid or the credit card account is closed. This process allows you to demonstrate that you have recovered from your credit problems and can pay your bills. Also, good repayment performance may mean increases in the future.
4. Your credit report. Credit bureaus must provide you one free copy of your credit report a year. You have the right to challenge any and all data in the report you feel may be in error.

The three Credit Bureaus are:

We know credit reports can be confusing. That's why we've partnered with Bank On Hampton Roads to help!

They offer free financial education classes for adults that will walk you through understanding your credit report and more.

We believe in accessible financial education. That's why we partner with Bank On Hampton Roads, which offers a free financial education program for adults.

An essential step in financial self-care is checking your credit report. You can get a free report from each major credit bureau once per year to help protect yourself.

To access your free reports, go to www.annualcreditreport.com.

Your Credit Score: The Most Important Number You Own

Your credit score is a key figure that appears on your credit report. This single number profoundly affects your financial life, influencing:

• The interest rates you pay on mortgages, car loans, and credit cards.

• The cost of things like car and home insurance.

• Decisions on renting an apartment or even job offers.

Scores typically range from 300 to 850, with a higher score leading to better financial opportunities.

Your credit score is a complex number derived from the information in your credit reports, with five major categories contributing to its weight. Understanding these factors is key to improving your score: