Credit Report Accuracy
Credit report accuracy may not be that accurate. Consumers often rely on credit reports and scores to establish credit. Mortgages, car loans and credit card accounts are some of the more common examples or creditors who look to consumers' credit scores to extend credit. The better the credit score of potential creditors, the more likely loans will be made. Perhaps more importantly, the better the credit the less those loans will cost.
Creditor input and public records provide primarily for credit report accuracy. But creditor input is not always so reliable, nor are all public records. This summer credit reporting agencies will begin relying on public records to evaluate credit worthiness. That's good. Given the many inaccuracies of credit reports in the past, this should be a positive move on behalf of consumers. This LA times story pinpoints the potential problem with credit reports, as well as the measures taken to make the reports more accurate.Credit Fixes
Bankruptcy is a negative on your credit, but your debt is often worse. This is particularly so if you cannot afford your current debt. Not paying your debt on time, or paying it at all, can undermine your credit severely. Lawsuits can be even worse. So although on its own a bankruptcy is bad, its effect is positive on your credit. Credit report accuracy often understands this. So although you may have a bankruptcy on your record, your debt is gone.
Balancing your debt, and whether to file bankruptcy, is different for everyone. The issue often is which is worse, bankruptcy or debt? Though it is unique to each, those even considering bankruptcy are usually in better shape filing bankruptcy and eliminating their debt. It is better to file bankruptcy and eliminate your debt, especially if your debt is growing. Remember, credit report accuracy considers your debt-to-income ratio as much as other information in your credit history. That's why bankruptcy works. It eliminates your debt.
If you are evaluating options to deal with your debt here in Sacramento, and are considering bankruptcy, contact my office for a free consultation. The only thing you have to lose is your debt!