Consumer credit is a type of loan extended to ordinary consumers to buy consumer goods. Credit, broadly defined, is the provision of money from one entity to another, where the lender does not expect to be immediately compensated. Instead, the parties agree on payment at a later date, or in periodic installments. Many people in Somerville, Massachusetts deal with 1 type of consumer credit almost every day: credit cards. These tiny pieces of plastic are one of the biggest sources of consumer debt in the United States.
Why can't I Get Credit in Somerville, Massachusetts?
The most likely explanation as to why a Somerville, Massachusetts bank won't give you a credit card or loan is that you have bad credit. In Somerville, Massachusetts, credit reports are prepared by private companies that have access to a great deal of financial information about almost anyone who has a Social Security Number. These companies are called "credit bureaus." They take relevant information, such as one's credit-to-debt ratio, and past-due payments, and use complex mathematical equations to generate a numerical score. Relatively few people know what these exact formulas are, since they are well-guarded trade secrets.
Under U.S. law, you are legally entitled to one free credit report per year. This allows you to perform a simple financial check-up, to see what's hurting your credit, and to report any false information contained in your report. There are many websites that provide easy access to this information, but most of them require registration with a credit card. Once you view your free report, they will begin charging you a monthly fee unless you opt out. Some of them make this challenging by requiring that you cancel your membership by phone, rather than letting you do it online.
How Can I Improve My Credit Score in Somerville, Massachusetts?
To improve your credit rating, there are many things you can do. First, you should check your credit report for errors and report them to the credit bureau. These companies can make mistakes like anyone else, and sometimes these errors can damage your rating. It also helps to show that you are willing to use credit, but can do so responsibly. For example, if you have little to no credit history in Somerville you might consider getting a credit card, making a few small purchases each month on it, and then paying off the balance in full at the end of each month. This takes a bit of discipline, but it is a good way to quickly establish a good credit rating.
Credit reports are meant to be a tool for lenders to easily assess a person's risk as a borrower. Therefore, showing that you are able to pay back your debts on time can be very effective in creating a good credit score.
How Can a Somerville, Massachusetts Lawyer Help?
A good lawyer specializing in consumer bankruptcy or other consumer finance issues in Somerville, Massachusetts can be instrumental in resolving consumer debt issues. These issues can be complex and frustrating, and a lawyer can make the navigation of them much easier.