Credit Repair Tips and Tools

Learning about credit, how it works, what it is, how to build it, how to hurt it, why we need it, how it can help us, and how to fix it, can be a more important lesson to a teenager than anything they learn in school this year.

We can all agree that the average adult does not need to use European history, calculus, and earth science to help them pay the bills and buy a house. Well credit does help those things, and we need to learn about it as early as we can.

For an adult, learning about credit is so important because it can be the key to a financially successful life. Knowing how to borrow money, make payments, budget, and save money are very important. What we have to also remember is what a good number can do for us. Some of the most common things are; getting a home loan, a car loan, a credit card, and financing. You can get all of these even if you have a low number, but a good number means you have to pay less on finance charges and interest rates. That can save you hundreds and even thousands of dollars while you are paying the loan off. Some things that may surprise you that can be influenced by your score are; car insurance rates, getting to rent a home, and getting a new job.

If you have a low score and want to fix it you can go with the traditional way. That includes paying your bills on time and not borrowing too much money. If you need a faster solution than your best bet is credit repair. A credit repair company can fix any score no matter the reason it was damaged including; bankruptcy, foreclosure, identity theft, and even missing payments. The process is fast, simple, it can be done in weeks, and it is affordable and effective.

How to Repair a 400 Credit Score

If your credit score is absolutely dismal you’re right to worry. Fortunately this is not the end of the road and there are actions you can take to improve your credit score, even if it is as low as the 400s. There are people that have come back from bankruptcy to fix their credit and now have stellar scores. Although something like that could take up to 10 years it is definitely worth the effort.

The first step would be to order your credit report. Make sure you get one from all three credit reporting agencies as well. It’s important that you get all three reports to get a full picture. Lenders are not required to send information to any of the bureaus and most often they don’t send information to all three. That is why sometimes you will have negative marks on one report and not the others.

Once you have your reports in front of you go over every section very thoroughly. Check to make sure that there are no mistakes, for example a note indicating there was a late payment when in fact all of your payments had been prompt and on time. Like yourself the people that work at the credit bureaus are human and make mistakes. If you don’t catch these mistakes trust me, nobody else will. Should you find any mistakes all the have to do is notify the Bureau and the lender involved both by phone and in writing. The Bureau will then have 30 days from receiving your note to investigate the issue. In your letter I suggest you mention that you will be following up with them from time to time. Remember just because an issue is investigated this not mean any action to remove it from your credit report will be taken. That is why you must follow up and make sure that everything is taken care of to your standards.

The next thing you must do is list your link when it counts and create a plan to start repaying them as soon as possible. I would suggest listing your accounts by the balance owed and start paying off the lowest balances first. This way you can start knocking off those extra interest rate payments as soon as possible. Another option would be to start paying off the highest interest loans first.

Creditors use your payment history as a giant chunk of the formula for calculating your credit score. That is why it will take some time before your score starts to rise simply from paying your bills on time. After you have shown a steady history of on-time payments is when you’ll see the most improvement in your score.

Good Credit Repair Companies

Are you looking for good Credit Repair Companies?

There are a lot of reasons to search for a reputable credit repair company. Maybe you have tried repairing your credit yourself and have realized that it is too time consuming or maybe you have come to a stopping point and don’t know what else to do? I will try to give you an overview of what to look for and maybe tell you who you can trust. You must do your own research and be on your toes before you pay anyone!!!

Who do you trust when it comes to credit repair companies?:

Unfortunately, it is estimated that fraudulent credit repair companies have cheated people out of millions of dollars over the last several years. Consumers have flocked to these “credit doctors” only to discover that their advertisements proved far more impressive than their results.

Many credit repair companies are effective and legitimate. A legitimate firm uses the dispute process made possible by the Fair Credit Reporting Act to obtain results.

Guarantees are a warning sign of a questionable credit repair company. On the other hand, a warranty whereby the credit repair company promises a refund if certain results don’t occur, is a better, more realistic claim and that may be made in the form of a guaranty.

Be sure to ask exactly what they plan to do for you before you pay.

Some companies charge an hourly rate, some charge per item on your report, some charge a monthly rate and some charge a combination thereof. You should be sure of the bottom line before you commit to any kind of contract!

New or Old Credit Repair Companies?:

Should you pick a credit repair company that has been in business for years or a company that is new? They both have their pros and cons.

A new company is one that you are very reluctant to hand over your hard earned money to because who knows if they will be there tomorrow? On the other hand I have found that a company just starting out will give you the personal service that is really hard to find in a company that has been around for years.

An older company is one that can get the job done or they wouldn’t still be around. You may have to wait in line and never get to talk to a real person!

It’s up to the individual. Everyone has their preference in those re-guards but keep in mind that anyone can be out to take your money whether they been doing it for days or years!!!

How to Repair Credit

One little advertised strategy you should use when learning how to repair credit is applying for a passbook loan. This technique will give you great results when you choose to do it yourself. Basically all you have to do is deposit money into a blocked CD or savings account where you can’t have access to the funds. You also surrender your passbook to the bank and waive any ATM privileges.

Not all banks offer this type of loan. You may have to spend some time trying to locate a nearby bank that offers one. Banks don’t actively advertise this type of loan to people with financial issues on their record. If you can’t find a local bank willing to offer one, a personal loan will accomplish the same thing. However, you may be required to secure a co-signer or provide some sort of collateral for the loan (but don’t use your house).

When you find the right loan, be sure to go over these important features:

1) Be Sure It Reports To The Three Major Agencies

Make sure the lender supplies your payment history to the three bureaus. After all, this is the main reason you’re taking out the loan. If you find the bank doesn’t work with the three bureaus, move on to the next bank.

2) Find Out The Minimum Deposit

Ask the bank what the minimum deposit requirement is to open a passbook loan. Deposits can range anywhere from as little as $50 to as much as several thousand dollars. You need to find one that you can afford. When teaching my readers how to repair credit, I recommend a minimum passport loan of $1,000 if you can afford it. This amount is high enough to have a healthy impact on your FICO score when you do it yourself.

3) High High Is The Interest Rate?

With these type of loans, don’t expect the interest rate to be low when you have a record of financial problems. You should also expect the interest earned on the account to be less than the rate you pay on the loan. That’s how the bank profits from your loan. You may question whether it’s worth spending the extra money just to take out the loan, but let me assure you the benefits to your score make it well worth it.

4) What Are The Terms

You’ll find most passbook loan terms to last anywhere from one to five years. For the best effect on your score, I recommend you take a minimum term of 12 months. This provides a long enough time to make a positive impact on your score. You also save on the interest payments.

5) What Is Your Borrowing Limit?

Banks won’t lend up to the full amount of your deposit. You’ll find they typically lend up to 80-95% of your deposit amount..

Though a passport loan isn’t widely advertised to people with financial problems, it’s a great tool to use as you learn how to repair credit and do it yourself.

Increase Your Credit Score

Your credit score is very important in every aspect of life. Not many people know that many potential employers are checking your credit file, and other things are also influenced by your history of repayments.

Don’t be fooled and think that nobody will find out about your bad credit: many people do not realize the importance of a good credit score, or think that they can hide it from others.

If your credit score has been damaged by late or missed payments, you should take every effort to repair it. It is in your best interest and your financial future will depend on the success of the credit repair. Below you will find some easy to follow tips to be able to get started without using an expensive credit repair company.

  • Assess your credit

When you first realize that you have a bad credit rating, you will possibly have no idea where it is coming from. You might not remember the time when you were late with a payment, but the bank does. That is why you should get a copy of all your statements to compare your records with what is in your credit file. If there is anything wrong, you should contact the bank to get it fixed. You need to ask the relevant department in writing, submitting supporting evidence.

  • Stop the arrears

To start with the credit repair, you first need to get out of the red and get all your accounts up to date. Every letter you get from the finance or credit card company will be recorded on your credit file, and that means more and more damage. If you are temporarily unable to meet your repayments, you have to contact the company to ask for flexible options, just don’t let things to get out of your hands.

  • Set up a tight budget

To get back in the black, you will have to meet your repayments, and that means saving every penny you can. Set up your income and expenditure spreadsheet and find out where you can save money. This can be a subscription service, traveling to work, or you might even decide to cook at home, instead of eating out. That leaves you more money to spend on credit repair.

  • Apply for bad credit consolidation products

If you find that you can’t afford your credit repayments at all, you will have to look for options to reduce the interest or lengthen the term. There are many ways of doing this, from personal loans to bad credit products, designed to repair your credit rating.