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 Farmington Hills, 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 Farmington Hills, Michigan?
If you can't get credit in Farmington Hills, Michigan, it could be because you have a bad credit score, or simply don't have any credit history. In Farmington Hills, Michigan, credit scores are created by private corporations called "credit bureaus." These companies compile all the available financial information on a person (such as the amount of credit currently available to them, and its ratio to their debt) and use it to calculate a simple numerical score. This number gives would-be lenders an easy way to assess a person's risk as a borrower. It is not known to many individuals exactly how your credit score is calculated, because the formulas used by these companies are closely-guarded 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 Farmington Hills, Michigan?
To improve your credit, there are many things you can do. First of all, you should report any mistakes you see on your credit report to the credit bureau. These companies sometimes make errors, and some of them can seriously damage your credit score. Also, you should show that you are willing to use credit, but able to do so responsibly. For example, using a credit card for a few modest purchases per week in Farmington Hills, then paying the entire amount at the end of the month.
Credit reports are a tool for lenders to determine how risky it is to loan money to someone. Therefore, showing that you consistently pay your debts in a timely manner is the best way to maintain a good score.
How Can a Farmington Hills, Michigan Lawyer Help?
A good Attorney who practices consumer bankruptcy or other financial practice areas in Farmington Hills, Michigan can be extremely helpful in resolving consumer debt issues. These issues can be very complex, and an Lawyer can make it much easier to navigate them.