by BlondieWrites on May 18, 2010
The Basics of Credit Clean Up
Credit can be a fickle thing and if you don’t know much about credit, your credit report or score and how credit works it can seem overwhelming to try and find ways to fix or clean it up. As overwhelming as credit practices may seem there are ways to clean up your credit and plan for a better financial future with smarter spending and borrowing practices.
There are four main ways to clean up your credit and the more cohesively you use them together the better the result at the end. This article will briefly go through the four areas and how to take part in them. Through your research you are likely to come across more in-depth information that will play a part in working with the information provided here to give you the best results in cleaning up your credit.
The first way to start your journey toward better credit and a higher credit score if to work on a pay off or debt management plan. The more you ignore your debt, the worse it gets and the harder to fix. You need to first get all three of your current credit reports and lay them out in front of you. Take the time to use a highlighter and highlight all the accounts that are currently open and have a balance. Some of these are likely past due, while others may not be. To get a complete look at what you need to pay off, you need to highlight them all. This should NOT include monthly living expenses like utilities, rent or other accounts that may be listed on your credit report. This is only the debt you need to get out from under. The next step to forming a debt pay off plan to consider the highest balances or highest interest rates first since these are more harmful to your credit, though the smaller accounts may be easier to pay off. Remember, while you are paying off larger debts with larger payments, you must still maintain the minimum payments on monthly accounts and living expenses to keep from worsening your debt.
The next step in the credit clean up process should be to consider the good accounts you have and work hard to keep them in positive standing. These accounts will help to steady and improve your credit when you get the bad accounts paid off. When you have paid off the bad and past due accounts, you can consider adding a good or small account to keep in good standing, but don’t consider adding anything until you have dug yourself out of the hole you are currently in.
Next, you want to check over your credit report for errors. This can happen by accident or through the presence of identity theft. Either way you need to find it and dispute it. Each credit reporting agency has their own dispute policies and procedures and you will need to read through and follow them accordingly to dispute incorrect items on your credit report. Often times this information will print at the end of your credit report and should be readily available on the agency web sites as well.
The last and probably most important thing to consider when working to clean up your credit is to form and set up a plan for future financial success. You need to be able to handle money in a smart way and avoid getting back into the same situation or having to work so hard again. To do this you need to learn to live within your means and learn the difference between need and want. This can be especially hard if you’ve become accustom to a certain standard of living or have friends with a higher standard of living than you can afford. You need to be honest with your self and with others about the life you can currently have, this will help you be about to reach the life you want in the future.
by BlondieWrites on November 2, 2009
When do you need credit repair? The moment your credit score is anything less than 600 points because this could make it difficult for you to apply for a loan.
If it just so happens that your credit score falls below the minimum, don’t panic because this issue can be resolved. Never for one moment should filing for bankruptcy become an option because this will be on your record for 10 years or so.
Credit repair may not be as bad as you think if there happens to be a mistake on your credit report. You can check on that by getting a copy for free from one of the three credit agencies namely Equifax, Experian, and Trans Union. You may request a copy simultaneously or get one at different times of the year.
Once you have it, review if there are any errors on the document. There are instances that one report will say something different.
If you know for a fact that a certain issue has already been resolved, send a request to have this changed together with a letter and the documents that prove this should be removed from your record.
But what if the credit report is real? Well, the only thing you have to do to repair your credit score is to pay it off. If you are having a hard time due to the big amount, get help from a credit counselor who can act as a negotiator and help create a debt consolidation package.
The debt consolidation package must be placed in writing as it signifies an agreement between you and the creditors. . This document will save your life should there be any problems in the future like if the creditors decide to void the agreement.
Once the debt consolidation package has been made, it is time for you to come up with the money and that usually means cutting down your expenses for the moment.
If what you are saving is not enough, you may need to make some hard choices like selling off certain valuables especially when no one will lend you the money except perhaps if you have friends that are very understanding.
When you have finished paying off your debt that could take months or even years, make sure you get a settlement letter from them and send a copy of this to the credit bureaus so this can be updated on your credit report.
There are lessons to be learned once you have successfully undergone credit repair.
First, keep an eye on your expenses. If the credit given to you is quite big, don’t be tempted to max it because you will mostly have a hard time paying for it.
Second, while most creditors will allow you to pay a minimum, whatever is left grows because of interests so you are not doing yourself any favors by not paying this amount in full.
Third, if this is something you can’t do alone, don’t be ashamed to ask for help because there are counselors ready to help you out.
Fourth, pay all your bills on time and in full.
Credit repair could have been avoided if you played it smart. Now that you are here, you have to do what is needed so it can be corrected.
by BlondieWrites on November 2, 2009
Overspending is a mistake that a lot of people make. This is because they think that as long as it is approved they can continue to do so until it maxes out. This never ends well because they don’t have the funds to pay for what they purchased which is why consolidating credit card debts is part of credit repair.
If you think this problem is only in the US, think again because the same situation happens in other part of the world.
Credit card consolidation is very simple. You combine all the debts you owe from various creditors so you end up paying only one creditor monthly.
There are many benefits for credit card consolidation.
First, you get to pay off your debt at lower interest rates than those that are already prevailing in the market.
Doing so will re-age your account. This means that your account is current and active as long as you keep making the payments that you agreed on.
While most card companies charge you fees for being late on your payments, the credit card debt consolidation program waives that so what you will only be paying what you actually owe.
Lastly, the debt consolidation plan buys you time so you have the choice whether to finish paying in a matter of weeks or months.
When you are able to consolidate your credit card debt, the next step is to come up with the money to pay it off. You can try reducing your expenses, asking for a raise, getting a second job or selling some valuables.
So do you need to apply for credit card consolidation by going to a bank? You can course this through a bank but there are private and non-profit organizations that offer similar services. You just have to find the right one to work with and then cooperate with them.
When you are looking for an organization to work with, make sure they are legitimate because some of these are scams. This isn’t good and you surely don’t want to fall for that because you are just wasting your time and money.
Once you notice that the money you owe is getting smaller, you are already on the right track and it won’t be long before you have finally been able to do some credit repair.
There are a few things you can also do to improve your credit score. You can open a new line of credit and if the major credit card companies will most likely deny your application, get a credit card offered by supermarkets or groceries and those offered by banks.
Don’t forget to pay your bills and other expenses on time because all that hard work you have done will go to waste if you miss a payment.
The amount of money you owe to creditors took months to grow so don’t be surprised if it takes awhile before you are finally debt free. Remember, you put yourself in this situation so the only person to blame is yourself.
Credit card consolidation is just a part of credit repair. Once it is in play, honor your commitment because that is the only way that your credit score is going to improve and you will once again have good standing with your creditors.
by BlondieWrites on November 2, 2009
In today’s slowed down economy, everyone needs to maintain a good credit status. A good credit rating means one is financially responsible enough to keep the connect between personal income and spending on a constant and realistic level. So if one suffers from missed payments, this reflects badly on one’s credit status. Enter credit repair.
This article covers some tips so you can do the credit repair yourself, so you won’t have to pay for a company to do that for you. Most of those companies offering an almost instant credit repair are frauds anyway.
Acquire hard and soft copies of your credit reports from the credit companies. It’s always better to know the lay of the land than not to know. You should be able to receive a no cost credit report per year. So avail of that. Also, when you get denied for something, you also become eligible to ask for a no cost credit report. This will give you a clear view of where you stand, and tell you how much work needs to be done. When you have the accurate numbers, you can plan ahead better than when you relied on guesswork.
Examine your own credit history, spending behavior. You have to absolutely certain all accounts are yours, that one pretended to be someone else and spent under your name. Identity theft is common and you can try to dispute the records when you think someone posed as you, over the phone or via email and snail mail. Also, once you ascertain all the accounts are truly yours, make sure they balance out. Pay up what’s still needed to be paid. Tie up loose ends.
Settle accounts in collection first, and right away. Address these first as they negatively affect your credit record. Most collection companies will take whatever you can give them, and since they’re willing to talk this out, you might as well call them and see how far you can plan your debt payment to them, before actually starting payment.
Bring your maxed out credit cards below its limit. It could take maybe two whole years for your credit status to get better when you have maxed out cards. Some companies out there actually do try to lend you a hand with this, at no cost at all. But you have to find those legitimate no charge companies yourself, else you be scammed into payment.
Ask relative to add your name to the list of users they allow to use their credit card/s. If your name appears in someone else’s credit card users’ list, that’s taken as a sign of your trustworthiness. That means you credit provided is assumed to have found out you’re financially stable.
No one said it would be easy to regain a good credit status, especially with the economy this down in the dumps. You can do your own credit repair cleanly, legitimately, but it would take some time, and some continuous, focused effort.
But the good thing is that you can do it yourself and it can be at no cost to you.
by BlondieWrites on August 26, 2009
In these economically hard times, your one chance for survival is to have some decent savings in the bank. That way, should you lose your job because of the recession that is going on, you will have something to fall back to, some money that will help tide you over until you get another job. If you don’t have this, your only alternative is to get a loan. But what if you have a bad credit standing? How can you repair bad credit?
A bad credit standing is achieved if you have managed to not take care of your finances and loans. People with bad credit scores are those that have not had any payments for their loans for years or those that have not managed to even pay half of their credit card debts. If you have a couple of bank loans and a few credit cards that you have not yet fully paid in years and with interest already growing, chances are you have a bad credit standing.
Although it is quite easy to get a bad credit standing, it is hard to repair your reputation with the banks and redeem yourself. However, it is not saying that it is some impossible task. You can repair your bad credit by following some of these tips and tricks.
1. Get a Credit counseling
Admitting that you have a problem and seeking help is the first sign that you are willing to change your ways. For banks and financial companies, this is a good sign. It means that you are willing to make changes in your life and you are willing to face the consequences of your actions. Credit counseling will provide you with sound advice on how to manage you debt and how to make small payments until you finish paying for the debt. It will even give tips on how to save money and on how to quell your shopping addiction.
2. Making payments
You also need to show that you are going to pay for your loans and you can do this by making regular payments to the account. It does not matter if you cannot pay the whole amount or that you are only paying a small portion of the total loan. What is important is you are paying the loan.
3. Consolidate your debt
Most people who have multiple debts will be asked to make one huge loan to pay for all the other debts so that you will only need to worry about just one loan. Before you do this, make sure that you have checked with all the banks and have managed to get the lowest interest rates for the loan. This way, you can save much especially if the interest of the new loan is significantly smaller than the interests of the loans that you are paying for.
4. Make a commitment
Going to the bank and assuring them that you will be paying your loan will give the impression that you are a man of your word and that you are not afraid to face them. When you do this, it will be more likely for the banks to give you a loan again especially if you need them in an emergency. After all, you were man enough to repair your badly-shaped credit rating. How can they not trust you?
by BlondieWrites on August 26, 2009
Easy and Quick Steps for Credit Repair
In today’s society where we are in a generation which is very much influenced by credit transactions, bad credit may definitely cause misery to one’s life when it is not resolved. Imagine, without a good crest standing, you cannot easily get a good apartment, much more to mortgage. Thus, this article may help you to avoid the mistakes that may lead to a bad credit, and this may provide ways to an easier and faster credit repair.
The word “quick” is a very relative word, thus it may differ from one person’s definition to another. It may depend on the situation that each individual is into as of the moment. For some people, thirty days is quick, but for some, lesser days is their meaning of quick.
Your situation may include all the damages that were inflicted, and their effects. Your financial standing, your efforts to resolve these problems, as well as your moral fiber are all considerations that are to be taken account.
You should always remember that in resolving these credit problems, there is always hope. Here are some of the ways on how you may restore your credit and remove all negative items that make it a bad credit:
1. First and foremost of all, you should always remember to pay your bills on time. Thirty five percent of your credit score is accounted on your ability to pay bills before they fall due. Tardiness may cause you to lose as much as 100 points. Thus, this first step is very much important for it can either make or break your attempt to repair your credit standing. Thus, you should always do everything in your power to settle all your bills on time.
2. Try to be aware of what is written on your credit report. If you are not yet insolvent, or something near that, you should refrain from getting free annual credit reports. Some experts believe that these free reports are tied to a technicality that increases time for reinvestigation when there is a dispute. Thus from thirty days, it shall become forty days.
3. You need to raise your credit score. With an increased credit score, the repair process can be accelerated. You may increase your credit score by cutting down your existing balances and debts.
4. Make sure that your credit reports do not have inaccurate information. These mistakes may hold back your ability to get credit. Be vigilant of these details, some debt collectors may use this dirty tactic against you. Once you have seen inaccuracies, you should report them to the bureau in writing. If the mistake was committed by the furnisher, then you should inform him because it is his duty to correct such mistakes. However, if such errors were made by collectors, then a report against them should really be submitted.
5. You may also try to dispute entries made by credit bureaus because old debts are not worth verifying anymore. However, if you try this kind of defense, you should not rely on dispute letters found in the internet. It would be better if you write your own letter. This may show how legitimate your claim is.
6. Lastly, you should not dispute your open accounts for these may help you build a good credit history. Just make sure that you pay them on time.
by BlondieWrites on August 26, 2009
What do you do when you have a bad credit score? Panicking will not solve anything and if you can take this problem without any assistance, you can surely do the credit repair yourself.
But how do you do that? The first step is to find out what is written on your credit report. Is everything there correct? Should there be discrepancies, send a letter to the credit agency together with the supporting documents. That way, they can make the changes and this will be reflected on your credit report.
If there is nothing wrong with the report and you have a problem paying your creditors, it is best to inform them at once so they know what is going on and a deal can be struck. To them, they would much rather that you pay a certain amount rather than nothing each month.
This is because even if they can take the matter to court and they do win, you will still not have enough money to pay for what you actually owe them and in the end, they do not get anything out of it.
The agreement you struck must be made in writing so you have something to show in your defense should any problems arise in the future. Since they will keep their part of the bargain, just make sure you do your part.
To do that, you need to create a budget and make sure you are saving enough money to what you agreed to pay. You may have to cut down your shopping expenses and eating out for quite some time. Whatever you earn should be used only for the essentials like bill, gas and groceries.
Minimize the use of your credit card. As much as possible, pay for items with cash. If you need to use your credit card, monitor how much you can only spend monthly so the money you already owe does not get any bigger.
If you have more than 4 credit cards, try cutting them down to only two. The ones which should go are the ones that have high interest rates and those that were less than 6 months old.
At the same time that you are paying off your debt, it will be a good idea to get a secured credit card to continue building up your credit history. This type of card is unique because you already have the funds in the bank and this will just be deducted every time this is swiped in a card terminal.
Since banks will not give you a loan when you need cash, join a credit union.
You will soon have a good credit rating if you are able to stick to the plan for the next few months or years. Remember, your payment history has the heaviest impact on your credit score.
Credit repair is being able to pay what you owe gradually is much better than filing for bankruptcy. This is because it will be on your credit for the next 10 years so why put yourself in that situation when you can do something to change it now. All it takes is some will power and guts to face it head on.
Remember, you put yourself in this situation so find a way to dig yourself out.
