Restoring your good name from bad debt: The Basics of Credit Repair
In January, #FinanciallyFocused hosted a Debt Healing Seminar and it was eye-opening how persons shared the nightmare that debt and the damage to their ability to get credit to fund their life. It wasn’t just about getting clear on the relationship with debt and how it can be reduced or eliminated. The participants of the Debt Healing Seminar shared the overwhelming shame that they feel about the debt they carry. The participants shared that in order to cope with the debt, they drained their savings account and borrowed from friends to stop bill collectors from harassing them. However, what stood out the most was the story of a woman, let’s call her Andreen, who sold her house to stop the bank from sending bill collectors after her. Yet, the proceeds of the house sale were not enough to cover Andreen’s total debt. There had been mistakes in how the interest was calculated by the bank and also mistakes in how Andreen’s account was handled. This meant that Andreen had to go through months of trying to convince the bank that she was not in error. Andreen felt overwhelmed with the volume of paperwork required to sort out her credit situation and save her house. So Andreen ended up with no house, no ability to borrow again to fund her business because her credit report was in negative. Andreen’s good name was tainted. Right now, Andreen’s business is on the verge of closing and she is living in the helper’s quarters of her daughter’s house.
In the Debt Healing Seminar, it was clear that credit repair was something that was new to Jamaica and had not been fully understood by banking professionals. Neither did self-employed persons understand what the process of credit repair and credit restoration meant and how it could work in your favour. Bottom line was that had Andreen gotten a credit repair specialist to work with her, she could have saved her house. And that was the fundamental takeaway from the January event. Credit repair and credit restoration saves families, saves businesses, and builds back a borrower’s good name.
Let us be clear, credit restoration is not a manner to get away from paying back what you owe. By having credit, you are using someone else’s money as payment for your purchases. In addition, it also indicates that you are swearing to repay the money to the agency or person that loaned you the amount. If you are applying for a loan, credit card, or mortgage, it is normal for the agency to check your creditworthiness. This is essentially based on the assessment of your credit history, thus helping them determine the possible risks of the deal and decide
the terms of the loan. Positive assessment means good financial background, which increases your chances of applying for credit.
In October 2010, Jamaica instituted the Credit Reporting Act. According to the Ministry of Justice website, this Act was established to provide for the sharing of credit information between specified bodies, the licensing of credit bureaus, and connected matters. So for the last 11 years, the Act has allowed your light bill, your Courts hire purchase account, your credit card, your mortgage, your loans and any other debt-related activity to be shared among financial institutions and connected parties. In March 2021, the Ministry of Finance & the Public Service sent out a press release that a Garnishment Policy is now in effect. The laws to improve the ability to track and monitor the public’s debt has been strengthened. Yet, based on the clients that #FinanciallyFocused helps through coaching and teaching, there is little of any understanding of how to both repair and restore your credit to get back your good name and access to funding to manage your life. Many persons are so emotionally burdened by their debt that they are unaware of the help available.
The Credit Repair
Financially Focused (www.financiallyfocused/creditrepair) has partnered with the Caribbean Credit Repair Association (www.caribbeancreditrepairassociation.com) and the University of the Commonwealth Caribbean (UCC) to establish the Credit Restoration Professional Certification programme. It is clear that education on the credit repair process is needed as Jamaica and the wider Caribbean is under a credit reporting regime and the public should have a pool of professionals to support them in getting their credit sorted out.
Credit repair and restoration is the process wherein consumers with poor credit histories try to reestablish their worthiness. Why is creditworthiness important? Simply because most of us do not have cash to fund our goals. Most of need a loan for a mortgage, higher education, an unexpected car repair, a medical crisis, you name it. When unfortunate financial decisions in the past block our future progress, it is a clear sign that we need help. That is where the credit restoration professional steps in and starts the credit repair process. So credit repair involves procuring the credit report from agencies and taking careful and appropriate steps in addressing apparent issues on the credit report, including omissions, misreporting, misinterpretation, or other inaccuracies.
If there are any discrepancies found in the credit report, the consumer is entitled to dispute the errors that unjustly harm their financial healthiness and creditworthiness. There are several laws and regulations that are designed to guarantee fair and legal undertaking of the credit report process. These laws can be used to legally and formally start the process of credit repair. So to be clear, a credit restoration professional is not an attorney at law. They are a financial support professional that has been trained to walk the client through the credit repair process. An attorney at law is absolutely appropriate when the debt requires Court intervention.
That said, you can do credit repair yourself and restore your good name. Here is the process:
- Every consumer is entitled to one copy of their credit report each year from each credit reporting agency.
- Every consumer can sit down, go through the credit report and begin the Investigations with regards to the real nature of the inaccuracies and errors that are on the credit report.
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In case your poor credit history is caused by circumstances beyond your control, you can always
request an upgrade in your credit rating to your creditor. However, this can only be done if you were
able to make amends to your credit records after the circumstances. -
However, once you are able to demonstrate enduring stability in your income and
prompt patterns in your payments, the situation can improve in the span of two to three years.
Naturally, we advocate that you engage the services of a Credit Restoration professional or even to become one for yourself! What influences your purchasing power and eligibility of availing any credit facilities in the future is your credit record. You should keep in mind that a good credit score can help in several purposes, such as: mortgaging a home, buying a car or applying for a job. On the other hand, a bad credit score can make you vulnerable to exorbitant interest rates and unnecessary loan terms from several companies. These two facts are important in helping you understand why maintaining a good credit score is vital.
At #FinanciallyFocused, we’re allllll about teaching you how to build YOUR own dreams and create your own TRANSFORMATIONS!! https://www.udemy.com/course/power-up-investment-returns/learn/lecture/24907130?referralCode=E37DB4D3CD41A18E3685#overview
