Two major US banks, Bank of America and JP Morgan Chase, will eliminate void debts from credit reports, affecting nearly a million citizens. These debts were supposed to be cleared post-bankruptcy, but their presence impacted individuals' ability to obtain loans and employment. Lawsuits alleging violation of federal law prompted this change, as the banks were accused of using these debts as an aggressive collection tactic.

Credit restoration involves legally disputing inaccuracies on credit reports with credit bureaus to improve credit scores. The process can be done independently or through credit restoration companies. It's important to differentiate between credit restoration and credit repair and to beware of scams. Steps include analyzing credit reports, identifying errors, and filing disputes. Reputable credit repair services can be beneficial but it's crucial to recognize and avoid illegitimate companies that charge upfront without providing services.

The Qualified Mortgage Rule, effective January 10, 2014, aims to prevent risky lending by ensuring borrowers' ability to repay and protecting lenders from lawsuits if they issue qualified mortgages. It may disqualify 20% of current mortgages but streamlines dispute resolution for credit report errors, highlighting the need for credit repair services.

Checking your credit report annually is crucial to detect fraud, catch mistakes, and understand low credit scores. It's an itemized history of credit accounts excluding your credit score. You can dispute errors or fraudulent activities with credit bureaus or seek help from credit repair companies. All Americans can access their credit reports for free once per year from each credit bureau via annualcreditreport.com, and it's wise to stagger these checks every four months to stay informed about your credit status throughout the year.

The article provides a guide for setting personal finance resolutions in 2021, focusing on getting a job, paying off credit card debt, building savings, and improving credit scores. It emphasizes the importance of financial security, especially after a tough year like 2020, and offers practical steps to achieve these goals such as updating resumes, debt snowballing, expense tracking, and credit report checks.

Debt negotiation can lead to reduced debts while affecting credit scores, but with preparation and smart strategies, one can minimize the impact. It involves transparent negotiation with creditors, realistic proposals, and may require professional help. Post-negotiation, consistent on-time payments and credit monitoring are vital for credit score recovery. Seeking additional resources and maintaining good financial habits can lead to financial stability and an improved credit outlook.

Creditors, especially credit card issuers, periodically check your credit report to monitor your financial health and adjust credit terms if necessary. Installment loans, like mortgages and auto loans, are usually checked once, while revolving accounts, like credit cards, are checked regularly due to ongoing lending. Lenders assess risk to decide on credit limits and interest rates, and may change terms or close accounts if your credit score drops significantly.

To avoid a financial hangover during the holidays, don't charge more than you can afford, avoid using low limit credit cards, and resist applying for new retail store credit cards due to their negative impact on your credit score from hard inquiries, reducing average account age, and high utilization risks.

Peer-to-peer (P2P) lending is an alternative financing method allowing individuals to borrow and lend money without traditional banks. It's inclusive, especially for those with poor credit, but carries a high risk of default. P2P lending can offer lower interest rates, but also poses risks with high-interest rates for risky borrowers and potential investor losses. Small commercial banks are affected, taking on riskier borrowers to compete. P2P is an option for those with poor credit, providing flexibility in credit scores for loan approval. Understanding the risks and terms is crucial for borrowers, particularly high-risk ones.

Improving credit is crucial for mortgage eligibility; perfect credit isn't required, but certain credit report items can hinder approval. Unpaid tax liens, unsatisfied judgments, and child support arrears can be deal-breakers, yet solutions like repayment plans may help. It's recommended to review credit reports and consult professionals before applying for a mortgage.