Seattle, WA (PRWEB) April 20, 2012

Having good credit has become as much of an asset in todays society as owning gold and property were 100 years ago. With good credit people pay less in interest on major purchases, may pay less for insurance and do not have to worry about potential credit checks by employers. Credit repair businesses offer consumers a way to clean up negative information in a credit report, but the service may not deliver on all that it promises. Below, Becky House, Education Director for American Financial Solutions provides important information when considering using a credit repair business.

First and foremost, says House, people need to know that whatever services a credit repair agency is providing, consumers can do themselves for the cost of some stamps. This is important because credit repair fees can run into the hundreds of dollars.

In addition says House, These agencies do not have magic wands. They cannot eliminate accurate, negative information any more effectively than an individual. In fact, under the Fair Credit Reporting Act, it is illegal to erase timely and accurate negative information in a persons credit file.

There is also a set of laws called the Credit Repair Organizations Act that governs credit repair agencies. Under the law:

The company must provide the consumer with a copy of the Consumer Credit File Rights under State and Federal Law before a person can do business with them.

After someone signs a contract with the agency it must wait three days before performing any services. This three day period is to allow the consumer to change their mind and not incur any charges.

The company cannot charge or collect money for until they have fulfilled the services promised to the consumer.

The company cannot suggest that someone create a new credit file by using a false Social Security number or using an Employer Identification Number (EIN) from the IRS. This is illegal.

For consumers, it is important to know how to make positive changes to a negative credit report. The first step is to obtain a copy of all three of the reports by visiting http://www.annualcreditreport.com.

Next review the reports and look for any possible errors. If there are errors contact the credit reporting agencies and dispute the information. A non-profit credit counseling agency such as American Financial Solutions can help you with this process at no charge.

Finally look for ways to add positive information to the credit report. Some methods that work well for many consumers are using a secured credit card, obtaining a share secured loan through a credit union, or asking a family member or friend to co-sign on an account.

Improving a negative credit record is not something that can be done over night. It takes time to move away from the negative accounts and time to build a history of positive accounts. Beware of anyone who promises they can repair credit reports quickly and for a fee. Remember the old adage, If it sounds too good to be true, it probably is.

Contact a non-profit credit counseling agency today for more information and help managing credit, debt, budgets and the financial future.

American Financial Solutions (AFS) is a non-profit 501(c)3 financial education and credit counseling agency that helps people find solutions for managing their money and improving their financial lives. Since 1999, AFS has helped individuals across the United States through one-on-one counseling, classes and the use of debt management plans. AFS is a member of the National Foundation for Credit Counseling (NFCC) as well as the Association for Independent Consumer Credit Counseling Agencies (AICCCA). AFS is also accredited by the Council on Accreditation (COA) and has an A+ rating by the Better Business Bureau. Find us and add us on Facebook, Twitter and Google+.

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author of the article BiVO

many times over the years was asked, what are you looking for when analyzing a loan on market conditions. Although all commercial loans are not the same and certainly not a magic box, decide the fate of a commercial loan, there are some very simple secrets that all commercial lenders and credit analysts for the creditworthiness of the borrower to decide. One such method is a good starting point known as 5 ° C and in commercial lending.

1) CASH FLOW STATEMENT – This is the most important 5 C as it is, how the loan will be repaid. Historical cash flow is a good indicator of future cash flows, such as the history of something is a good indicator of future performance. My Detroit Lions are historically bad team, and it seems that they are bad in the future. The company, which has historically struggled with cash flow, is often to fight in the future because it is a sign of management failure, lack of desire to be called too much of a product or a few fixed costs. On the other side strong historical features often but not always a good sign of future returns. Net income + depreciation + amortization + interest rate by 12 months of loan payments divided the subject loan, plus the company’s other debt obligations: a simple cash flow is calculated as often. The rule of thumb is that this ratio would be 1.20 times or more.

2) CHARACTER Many banks may be that in another place, I’ve always felt this was the second most important “C”, and in some cases as important as the cash flow. Sign represents the strength, ability and willingness of the guarantor to support debt, if requested to do so. The credit history of the sponsor, such as historical cash flow already mentioned, is a good indicator of a tendency to be payback time. The credit team examined the assets and liabilities of the guarantors of the loan without any problem. In addition, the guarantor of personal cash flow excluding the income from the business analysis of the topic. These three factors: credit history, personal property and personal cash flow are important aspects in determining the nature of the guarantor.

3) Collateral – If the default, security is often the only bank can restore some or all of the profit and thus is usually a secondary source of repayment of loans (cash flow is the first). Collateral can consist of a variety of objects, such as cash (my favorite), various types of real estate and land property company such as accounts receivable, inventory, equipment, vehicles, and there are many, many other options. Unlike cash, banks, the marginal amount that they borrow, give security. For example, the arrival of commercial apartment complex, b can be 75% in value compared to 50% of the value of the container. This protection, if the loan to the side, which can give back to the bank the most, and hopefully all, of the capital loan is.

4) CAPITAL – the bank has a stake in the project with the borrower. The loan officer wants to make sure that the borrower has some skin the game than to lose something when they go off the loan. The capital is the amount of equity or cash will be sold or have been built up through the company’s historical earnings (retained earnings). Amount of capital required or retained earnings is about the different types of commercial real estate, the situation on the market (currently a need for more capital), or type of business you borrow is based. Not magic secrets here, but the bank should not take any chances. Look at the mortgage industry today to see what happens when the borrower does not enter into risk in order – they can easily walk away from his house, and not to lose the deposit, because they never

5) Conditions – The “C” is usually such things as competition, management succession, and especially today, to borrow the market conditions to shoot in. Some lenders easy to remember and all worried about Y2K, were the companies ready to move out of the computer operation. A number of companies were more susceptible than others to Y2K problems. In today’s market there are a number of companies or Real Estate more likely to experience cash flow or defects than others. My car market, the companies tied operation, or Tier 1 suppliers, cash flow is likely to be, and should therefore difficult to assess when analyzing the creditworthiness of the loan.

As mentioned before, the consumer credit directive makes no box, not an exact science. A lot goes, if a borrower is credit worthy. Several banks of different criteria, but all the banks, the commercial use of 5 ° C, and as consumer loans in order to support this process means.

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