Almost one in three Americans are living with a bad credit rating, and this, according to a visiting money matters maven, leaves them prey to routine rejection, exorbitant interest rates and exploitation.
“We encourage people not to get involved with debt consolidators, or ‘quick fixers,’ because basically there’s nothing a credit fixer can do that you can’t do for yourself,” said Rob Anderson, president of Focus Inc., a company that sponsors a free self-help Web site — http://www.livingwithbadcredit.com — for the poor-credit group.
Anderson was in Baltimore Monday on a promotional tour. His six-year-old Tampa, Fla., company matches “underserved” credit risks with qualified sub-prime marketplace options — without charging the applicants.
“We basically tell people to help themselves. Get educated,” Anderson added, explaining that anyone with a FICO (Fair Isaac and Co., the consulting firm that established thestandard) score under 620 is considered a credit risk and “will absolutely pay premium interest rates when they actually do secure a loan.” The average credit score is 678, Anderson said.
Allen Cox, managing director of the Towson-based Maryland Coalition for Financial Literacy, agreed with Anderson.
“If you have a low FICO score,” Cox said, “it could also affect your ability to get insurance, to rent an apartment, to get a cell phone, enter into certain contracts or get into graduate school. It’s more than just [getting a loan].”
Focus Inc.’s Web site, Anderson said, features useful information, form letters and tools needed to begin repairing one’s credit within 30 to 60 days.
Anderson advises ordering the law-mandated, free credit report copy every year, challenging any errors and closed-account reporting; reducing all credit card debt to below 25 percent of credit limit (30 percent of score); never transferring one credit card’s full balance to another, as this will interrupt one’s credit history (15 percent of score); and prioritizing payments, favoring creditors who actually report to the bureaus.
