Rebuilding Bad Credit

If you have bad credit, then you are coming to, or already have come to, the realization that it is much easier to destroy your credit than it is to clean it up. It is a long process but it can be done.

The first thing you should do is get a credit report and find out exactly what is on that report. Look at every account. Check to see if there are any accounts in good standing. If you have a few accounts, or even one for that matter, that is still in good standing, keep it that way.

Being able to keep a few accounts will help to keep your credit score from completely bottoming out. So keep those accounts current at all cost. If, on the other hand, there are no accounts in good standing, don’t worry, you can still fix it, it is just going to take a little longer.

The worse thing you can do once you know you have lost control of your credit score is to ignore the problem. The sooner you start to fixing it, the better off you will be. Just because you aren’t paying the bills, doesn’t mean your creditors have forgot about you.

They are now in the process of raising your interest rates, and slamming you with late fees. So time is literately money when dealing with creditors. If you continue to ignore them, they will eventually send your account over to a collection agency and they will hound you continuously.

So call each of your creditors and explain your current situation. Many will work with you by lowering your interest rates and no longer adding late fees to your balance. They will try to get a commitment of as much money as they can from you each month. But do not let them push you into promising more money than you can actually send. If you have figured out they can each have $20.00 a month, so be it.

If on your own you are having no luck getting anywhere with them, you can seek out companies that specialize in dealing with them. They are experienced and usually have built a connection with someone at each credit card company that will work with them. They know the ins and outs of the business.

So, to rebuild your credit first clean up the messes on your report the best you can. Then cut up all credit cards except one major credit card, if you have it. Then make sure that you keep all your bills current. Do not apply for any new credit cards for a least two years, this gives your previous applications for credit time to “fall off” your credit report.

Once you start to get back on track, take a small loan out using cash as your collateral with your bank, say for $200. Pay it back on the terms set up on the loan. As you keep doing this, your credit rating will slowly improve.

David Tanguay is dedicated in helping individuals & businesses get out of debt. To compare hundreds of credit card offers & rates please visit Compare Credit Card Rates at http://easycreditcompare.com

Leave a Reply

Sponsors

 

August 2008
S M T W T F S
« Jul    
 12
3456789
10111213141516
17181920212223
24252627282930
31  

How Credit Scores Affect Mortgage Applications

With a good credit score an applicant will receive prompt response from many lenders, all of them offering low interest rates and low down payment options. The loan amount offered also may be high. On the contrary a low credit score would result in a lot of rejection from various mortgage financers. Because creditors wouldn’t come forward easily to give credit to individuals that have a history of difficulty in repaying existing loans. After all, creditors take risk when they finance mortgages against the credit history of a debtor. Naturally, they will wish to remain on the safe side and pick up less risky ones that have good credit histories. A good credit score means less chance of missing on payments and therefore less risky.

But there are some real risk takers that will come forward to finance mortgages for individuals with bad credit scores. They would charge high down payments and always high interest rates though. They may also fix additional charges for every little paper work and may charge high closing rates. The loan amount offered will also be considerably less. The individual with poor credit scores will not have much choice but to accept the terms and conditions as there are no other alternatives. This is a tight situation and to avoid this you must have a good credit score.

People with bad credit may fall in to the trap of ’secured loans’. Secured loans are the ones where the loan applicant offers an asset as collateral security. The lender becomes secure about the repayment of the loan and not the borrower. Securing a loan with bad credit score becomes easy only when the applicant is willing to offer some asset as collateral security. This again is a very dangerous situation where an individual runs the risk of losing his entire collateral asset in case of failing to pay the loan installments in time. An individual should always avoid such type of a loan.

Resort properties normally require large amounts of finance which a person with bad credit may find it difficult to obtain. So it is always advisable to keep your credit score high. Incase the credit score becomes low due to unavoidable financial reasons it can be improved upon. There is no need to lose hope simply because a person has a low credit score. If the property that he intends to buy has good equity he should go out and try to obtain finances for it. There are many sub prime lenders willing to offer their services.

For a review of your credit report as it relates to a mortgage loan and a consultation on the best loans available to you, give us a confidential, no obligation and no cost call.