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Credit Repair the Do-It-Yourself Way

Negative remarks on your credit report can cost

serious money. You do not have to despair though,

since it is never too late to become credit worthy

again. However, always remember that credit repair do

not happen overnight. It requires serious dedication

and perseverance to start in a clean slate once more.

How to Get Started

You should know what the three credit bureaus are and

what they are saying about you. Since creditors do not

have to report to Equifax, TransUnion and Experian all

together, they generally only report to one or some to

which they are subscribed to. This only means that

each report from each bureau is slightly different

from one another.

The first thing you need to do is to order your credit

report. Remember to order it from each bureau because

you would only waste time and money if you only order

a credit report from one bureau. The cost of the

credit report might vary from state to state though it

is estimated that the cost of your credit report is

around $9.

However, you are entitled to a free copy of your

credit report from the agency if you have been denied

of employment or credit due to your credit report. You

can ask the company to provide you with the name of

the credit bureau, telephone number and address.

Once you get a hold of your credit report, examine it

carefully. Since the credit bureaus create your credit

report basing on the information they receive on your

creditors, they are never verified. It is your job to

maintain your credit report a good reflection of you.

Be on the lookout for errors on typing, incomplete

information, and outdated and inaccurate histories of

your account. After examining the report correctly,

list all the errors you want to dispute and the

reasons why.

Since bad reports cost money, remember to be thorough.

You have two choices, which is to either complete the

argument form supplied with your credit report or

write a letter. It is also recommended to send a

photocopy of your report with the errors circled to

the credit bureau who supplied the report.

Additionally, do not forget to include supporting

documents with your report.

After sending the documents and report, do not forget

to keep copies of all the forms and the date you sent

it. Normally, the bureau will investigate the dispute

in the span of thirty days prior to receiving your

letter. More so, any item that is proved to be

inaccurate is removed.

Stability in Your Credit Life

Another way to repair your credit is to show that you

can still work on adding positive information and

stability in your credit life. Even if you have the

credit, there can be a time when you get denied of

credit due to insufficient credit file. There are

several creditors that do not report your credit

history to the credit bureaus. What you can do is to

try asking the grantors to report the information of

your account and the history of your monthly payment

to the credit-reporting agency.

You can also try building a solid credit history

through the use of secured credit cards. These kinds

of credit cards are offered to those with no credit or

in the process of repairing their credit.

Additionally, it is advised to open a savings account

in your bank. Doing so, would show your creditors that

you are trying to save and that you are reserving

money to pay off your debts.

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The Basics of Credit Repair

By having a credit, you are using someone else’s money

as payment for your purchases. In addition, it also

indicates that you are swearing to repay the money to

the agency or person that loaned you the amount.

If you are applying for a loan, credit card or

mortgage, it is normal for the agency to check your

credit worthiness. This is essentially based on the

assessment of your credit history, thus helping them

determine the possible risks of the deal and decide

the terms of the loan. Positive assessment means good

financial background, which increases your chances of

applying a credit.

The Credit Repair

The process wherein consumers with poor credit

histories try to reestablish their worthiness is

called the credit repair. It involves procuring the

credit report from agencies and taking careful and

appropriate steps in addressing apparent issues,

including omissions, misreporting, misinterpretation

or other inaccuracies.

If there are any discrepancies found in the credit

report, the consumer is entitled to dispute the errors

that unjustly harm their financial healthiness and

credit worthiness. There are several laws and

regulations that are designed to guarantee fair and

legal undertaking of the credit report process. These

laws can be used to legally and formally start the

process of credit repair.

Every consumer is entitled to one copy of credit

report each year from each credit reporting agency.

Investigations with regards to the real nature of the

inaccuracies and errors are possible and necessary for

a successful credit repair.

What influences your purchasing power and eligibility

of availing any credit facilities in the future is

your credit record. You should keep in mind that a

good credit score can help in several purposes, such

as: mortgaging a home, buying a car or applying for a

job. On the other hand, a bad credit score can make

you vulnerable to exorbitant interest rates and

unnecessary loan terms from several companies. These

two facts are important in helping you understand why

maintaining a good credit score is vital.

How to Repair Your Credit

The process of credit repair can be achieved through

hard work and discipline. Easy methods, which can help

you get out of poor credit history, can be quite

tempting. However, these easy way outs can only lead

to further difficulties in the future especially if

they are done illegally.

In case your poor credit history is caused by

circumstances beyond your control, you can always

request for an upgrade in your credit rating to your

creditor. However, this can only be done if you were

able to make amends to your credit records after the

circumstances.

Creditors do not normally trust consumers who default

on their payments. This can pose a difficulty to you

in obtaining a new credit. However, once you are able

to demonstrate enduring stability in your income and

prompt patterns in your payments, the situation can

improve in the span of two to three years. This way,

even though there is a case of bankruptcy, you are

likely to be eligible for credit cards within two

years if the steady income is maintained.

Keep in mind that there are no quick fixes in

repairing your credit. By contacting credit bureaus,

creating your own corrections, budgeting and

consolidating your debts can improve your own score.

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Repairing your credit entails getting rid of the

negative credit report information and catching up on

your overdue bills. This could raise your credit score

but might not be enough to make you credit worthy

again. However, to raise your credit score high enough

to entitle you to a loan, you have to rebuild your

credits. Doing so would only prove that you have the

capability to handle credit responsibility.

Although it might be difficult to start, but once you

achieve that momentum you need, you will be sashaying

to a good credit score. You can always begin by

developing the required credit habits.

The Do’s of Using Your Credit Card Wisely

Although many people are born without the skill it

requires to use credit cards, it is important to learn

the rules of the game. All you need to do is to

remember simple do’s and don’ts of credit card usage

and in time, you would welcome healthy spending habits

in your financial life.

The first thing you do want to ever do is to use your

credit card to make your everyday purchases,

especially food, gas and clothing. It is bad enough

not to have cash-on-hand but buying simple everyday

items can develop into a habit wherein you may tend to

substitute a credit card with cash. It is always

advisable not to take your credit card out of your

wallet for everyday purchases but instead use your

cash or a debit card.

The next thing you do not want to do is develop a

habit of making minimum-only payments. If you make

minimum payments each month, you are only increasing

the length of time it will take for you to pay off

your debt. Additionally, it will also increase the

amount of interest you could end up paying.

If you are one of those people who usually buy things

that are way off budget, remember not to use your

credit card to buy things you cannot afford. One way

to get into debt is living off borrowed money. You

might end up waking one day realizing you are so much

indebt that you wish to return your expensive

purchases back to wherever you bought them from.

The Do’s of Using Your Credit Card Wisely

Learn how to make correct decisions when it comes to

buying items you need against those you simply want.

Everybody knows what a “need” is and what a “want” is.

Remember not to substitute need from the want and vice

versa. If you are using your credit card wisely, it

only means that you are being responsible in

recognizing what things you need and which you only

want.

Next, always let your creditor know in advance if you

would not be able to pay your monthly payment on time.

Since most creditors offer assistance with your

payment if you give them a heads up, it is important

not to simply forget about the payment for no reason

at all. You can do this by simply calling your

creditor, explain the situation and ask if they allow

late fees to be waived.

Lastly, do not exceed with your credit limit. The

safest is to stay within at most 30% of your credit

limit. Because the major part of your credit score

reflects on the quantity of debt you actually have, it

is important to keep your balance low in order to

preserve a good credit standing.

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Most people end up with a damaged credit when they

experience a financial difficulty. Having a damaged

credit can make it hard for you to obtain a new one.

Those credit mistakes you made in the past can be

nearly impossible to live with, especially when your

new creditors and lenders are reluctant to provide you

with a second chance. And so, in order to reestablish

your credit, but cannot obtain a credit card, you only

need to get a secured credit card.

The Secured Credit Card

The secured credit card is not that different from the

regular credit card. It operates just like the usual

credit card but it requires you, the cardholder, to

make a deposit against the credit limit of the

account. The deposit is utilized by the creditor as a

security in case you default on your payments.

Usually, secured credit cards have a credit limit of

50% to 100% of the deposit you make. For instance, if

you make a $1000 deposit for the secured credit card,

the credit limit will be between $500 and $1000.

More so, these kinds of credit cards normally have

fees that regular credit cards do not have. These fees

will include processing fees, application fees, and

annual fees. However, always be on the lookout for

those cards with high fees since they can

significantly decrease your deposit and eventually

your credit limit.

Taking Advantage of the Secured Credit

Damaged credit is the effect of having poor payment

habits, most of the time. If you cannot obtain credit

through traditional methods, secured credit can

greatly help you demonstrate improved habits in your

payments. Since you cannot prove a renewed capability

to make payments on time until obtaining a new credit

card, having a secured credit card is a big help.

However, before applying for one, you must guarantee

that the creditor reports to all the three major

bureaus for credit. Otherwise, the card would not be

beneficial in the issue of reestablishing your credit

for the reason that future creditors would not have a

process of looking at the history of your payment.

Additionally, it would not be incorporated in your

credit score or in your credit report.

If your application gets approved, always keep in mind

that your sole purpose for the card is to rebuild your

damaged credit and eventually create a positive credit

history. It is important not to use the card to incur

debt and instead, use the card to buy small things

that you can actually pay full in a month. Moreover,

it is important not to charge any item that you cannot

afford to pay on the card.

Managing your secured credit card and developing good

habits in payment can help you move into an unsecured

credit card. There are several credit card companies

that allow a consumer to convert to an unsecured

credit card after the course of one to two years of

timely payments. Even though you cannot change your

secured credit card, you can still submit an

application for an unsecured one with another company.

Remember not to repeatedly apply for credit cards

after you have been denied of an application; this

would only make you look desperate. What you can do

instead is to continue to make your payments on time

on your secured credit card and apply again after the

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An important factor that plays an important role in

maintaining a clean credit report is actually the

contents of your credit report. The credit report is

pretty much the story of your financial life,

contained in a detailed document.

The credit report carries the credit score, which is a

numeric ranking usually between 300 and 850. Several

lenders use the credit score to help them decided

whether you are worthy of a credit. More so, the score

is also used to determine your capability of paying a

loan. The credit report is important and cleaning or

maintaining a good credit report is vital to your

financial survival.

A Look inside the Credit Report

In a credit report, the first entry is normally your

personal information. It includes your name, listed

telephone number/s, previous and current addresses,

reported differences of your Social Security Number,

past and present employer and the date of birth.

The information regarding your credit accounts follows

your personal information entry. This is also listed

in detail and normally includes loans, the maximum

loan amount, and information of any joint account

holders or co-signers. The credit report also

incorporate a section, called Inquiries, which lists

any person who has recently requested a copy of the

credit report.

There are some states, wherein the credit report

contains public record information. This information

can feature overdue payments, bankruptcies or other

judgments in the court. Normally, these entries can

last for up to ten years and may affect your chances

of obtaining a loan negatively.

How to Start

Firstly, in order to clean your credit report, you

will need to order a copy of the report. You must

determine what is out of date or inaccurate, after

which you can submit a letter to the bureau requesting

fixes to the information. This process may take a long

time and you may be required to do several follow-ups

with each bureau before achieving a clean credit

report. However, to perform this correctly, you must

be aware of the information the credit agencies are

allowed to report and the duration.

Ordering a credit report can be easily done and

accessible to everyone, since at least one free report

can be obtained by the consumer each year; this rule

is also included under the FCRA or Fair Credit

Reporting Act. More so, the consumer is also allowed

to obtain a free copy of his or her credit report each

year from each of the three major companies handling

credit reporting, namely the Experian, TransUnion, and

Equifax. However, in case you have already obtained a

copy of your credit report this year, you may be

required to pay an additional fee if you want another

copy.

Once you have obtained your report, review it

carefully. Every detail must be inspected since

bureaus can sometimes confuse names, addresses or

employers. Most often, people who have common names

have credit reports that may contain information on

other variations of their name.

Additionally, it is important to perform a periodic

check on the credit report. It is advisable to order a

copy of the report once a year and dispute any

possible inaccuracies. Always take careful steps in

handling your payments and make sure not to make any

late payments. Time is of the essence and even minimum

payments should not be neglected. Remember that

carefully managing your credit can add as much as

fifty points to your credit score per year.

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You know your debt is rising, but still cannot stop

using your credit card for purchasing items. Several

people get easily dependent on credit cards for

everyday expenses and impulsive buys. The fact that

you are borrowing money from the creditor for your

purchase might be tempting, but the truth is: you must

be able to pay it off on time. Neglecting those bills

can cause headaches in the future. You might get

malicious letters from your creditors, or even receive

threatening telephone calls.

Close, Shred and Leave

If you really want to avoid those from happening all

together or if you are starting to drown in your debt,

you have to stop credit card usage. Fortunately, there

are several ways on how to.

Firstly, many people would agree that closing your

credit card account is the best way possible. One and

simple call to your cardholder is sufficient enough to

inactivate your credit card. Doing so might even quiet

down that nagging feeling and desire to purchase items

using a credit card. Just think that there might be

one situation wherein the clerk says your credit card

has been denied; the embarrassment from that situation

is reason enough for you to inactivate your credit

card.

Shredding is also an excellent way to break the habit

completely. You can use an office shredder since it

works great on plastic as it does on paper. Since your

credit card is shredded into pieces, there is no way

that you can swipe it. However, if you do not have a

shredder, scissors are great too. Just cut the card

into small pieces and make sure that the credit card

number cannot be identified by potential thieves.

Another excellent way to stop using the credit card,

especially when you go out of the house, is to leave

them. If closing or shredding is not your style, try

taking your credit card out of your wallet when you

are about to go shopping. In this way, if you have the

urge to buy something you really do not need, you have

to think twice before buying it since you are about to

use your own money.

The Shock and What Your Can Do About It

You have been using your credit card for your expenses

but have you ever thought about the total amount of

cash you spend in interest alone each year? More so,

the duration of time it will take you to just pay off

your credit cards might shock you. It is all about the

numbers and these will put you into shock and can make

you think twice before using that credit card again.

For instance, if you have a balance of $1,000 and an

interest rate of 14%, it will take you about four and

a half years before you can pay it off; that is, if

you are making $25 in payments every month. By the

time you pay off the balance, you will have paid a

total of $347.55 in interest.

Since you know what credit cards can do, you might

want to stop using it once and for all. Learn how to

say “no” since this kind of discipline can help you

stop impulsive buys, thus stopping the use of credit

cards. Always think twice about swiping that credit

card for your purchases and you would not have to

think about repairing your credit in the future.

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