Credit challenged consumers should realize that there is no quick solution to repairing your credit and some quick fixes can also lead to a lot of difficulties.
Repairing your credit
At Auto Net Financial we believe in working with consumers who have bad credit and helping them raise their FICO scores and reestablish their auto credit – a form of credit repair – by filling out our online bad credit car loan application and financing a vehicle through our nationwide network of dealers that specialize in second chance auto loans.
One of the keys to successfully reestablishing your car credit is an understanding of the credit rebuilding process. For many people emerging from bankruptcy, or just trying to raise their credit scores in any way possible, the idea of repairing their credit quickly and raising their credit scores through a credit repair agency can be very appealing. But you should stay away from companies that attempt to do this by establishing a new identity for you.
Using file segregation
Web sites such as Auto Net Financial, specialize in reestablishing your car credit by taking out a second chance car loan. Although interest rates on these types of loans are higher than regular car loans, time and a good payment history will eventually get you back on track within a year or two, depending on the rest of your credit history. Unfortunately, there is no shortcut to the car credit rebuilding process that can help you immediately. Your other alternative, a tote the note car dealer, usually won’t even report your payments to the credit bureaus, which won’t help your current situation – a lack of car credit or a poor car credit history – at all.
There are companies out there, however, that will promise to cure your credit woes almost immediately. For a fee, they will create a new identity for you. For many people who fear they may not be able to get any credit with a bankruptcy on their credit report, this kind of program seems to be the answer to all their problems. This solution, however, could land them in jail or seem them facing a tough fine.
How it works
Here is how this quick fix works: The credit repair company sends out a letter addressed to individuals who have recently filed for bankruptcy. The letter states, in brief, that because of their bankruptcy, they will be unable to get a credit card, personal loan or any other type of credit for 10 years. To prevent this from happening, the company will, for a fee, hide their bankruptcy by establishing a new credit identity for them that can be used when applying for credit.
In addition to sending out letters to individuals on bankruptcy lists, these companies also advertise in the classified sections of newspapers, on radio, on TV and on the internet. The problem is, if you take the bait and sign up, things can quickly go from bad (a bankruptcy) to worse.
What an EIN is
Many of these credit repair companies will then suggest that you apply for an EIN (Employer Identification Number) from the IRS. Although an EIN may look like a social security number, it is an identification number that is designed for businesses to report their financial information to the IRS and the Social Security Administration. Once you receive this number, the credit repair company will tell you to use it instead of your social security number when applying for credit.
Using an EIN
In the first place, it is a crime to obtain an EIN for anything other than a legitimate business. If you use a phone or the mail to apply for one, you could also be charged with mail or wire fraud and in many states it is also a civil offense.
Other ways to repair your credit
While it’s true that a bankruptcy appears on your credit report for 10 years, there are a couple of ways that you can legally begin to repair your credit as soon as the bankruptcy is discharged:
1. Apply for a regular or secured credit card. Unlike a regular credit card, the secured credit card requires that you maintain a savings account with funds to cover the credit limit of your card. While this may not make sense, these banks do report to the credit bureaus and you can establish a positive payment history. Once you have a year or so of on-time payments, you can then apply for a regular credit card. Many of these lenders also have a provision that allows a secured card to be converted to a regular card once you’ve established yourself.
2. Apply for a bad credit auto loan. Even if you’ve had a vehicle repossession, as long as it was part of the bankruptcy – not before or after – there are many subprime car lenders that will consider you for a loan. Due to this fact, there are many online web sites that specialize in directing applicants with repossessions to dealers that are experts in bad credit financing, helping you avoid the embarrassment of being turned down at a local dealership that may not have a second chance auto loan department. One such site is www.autonetfinancial.com.
As we see it
Beware of companies that promise shortcuts to credit repair. You should also take note that as part of the Credit Repair Organizations Act, it is illegal for any company to charge you for repairing your credit until they have performed the service. Remember, if whatever they promise sounds too good to be true, it probably is.
At Auto Net Financial we have helped thousands of people with bad, blemished, bruised and tarnished credit buy cars and reestablish their credit at the same time. Our nationwide network of affiliate dealers specializes in bad credit car loans. Out web site will help you determine how much car you can afford and unlike many other companies, our toll free number is listed on our site in case you have any additional questions. When you decide to buy a car, our online bad credit car loan application can be filled out in the comfort and security of your own home.
For more information, visit www.autonetfinancial.com to see what we can do for you.
