Consumer credit is a form 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 instantly compensated. Instead, the parties agree on payment at a later date, or in periodic installments. Many people in Belding, Michigan deal with 1 form of consumer credit almost every day: credit cards. These little pieces of plastic are one of the largest sources of consumer debt in the United States.
Why can't I Get Credit in Belding, Michigan?
If you can't get credit in Belding, Michigan, it could be because you have a bad credit score, or simply don't have any credit history. Credit scores in Belding, Michigan are calculated by private companies known as "credit bureaus." These entities collect all the available information about your finances, look at how much debt you have, if you've paid it back in a timely manner, and other factors, and calculate a numerical score. This number provides possible lenders with a quick estimate of how risky it is to lend money to a person. The exact formulas that these companies employ to create credit scores are trade secrets.
Under U.S. law, you have a right to see your own credit report once a year, for free (you can, of course, see it more times than that, but you'll likely have to pay a credit bureau. You should be cautious, however. Many websites claim to offer "free" credit reports, but require a credit card number in order to register. If you do not affirmatively cancel your membership (which can usually only be done over the phone, and not online), they will start charging you a monthly fee.
How Can I Improve My Credit Score in Belding, Michigan?
The first thing you can do to improve your credit score is to check your report for errors. These companies are not perfect, and sometimes make errors in compiling your credit report, including extremely serious ones. If you find an error, you should report it to the credit bureau, and they will usually fix it. It's also good to show that you can use credit responsibly. For example, someone with no credit history in Belding may get a credit card, and use it for a few affordable purchases every month, and then pay down the whole balance at the end of the month. This is a good way to quickly obtain a good credit score.
Credit reports are meant to be a tool for lenders to easily determine a person's risk as a borrower. Therefore, showing that you are able to pay back your debts on time can be extremely effective in creating a good credit score.
How Can a Belding, Michigan Lawyer Help?
A good attorney specializing in consumer bankruptcy or other consumer finance issues in Belding, Michigan can be instrumental in resolving consumer debt concerns. These issues can be complex and frustrating, and an attorney can make the navigation of them much easier.