Repair Bad Credit
How To Repair Bad Credit Yourself
Many of us spend a lot of time and effort in building a good credit history. However, some times we run into situations which cause us to have bad credit. A lot of the time the damage to our credit is not planned. However, credit company statistics show that over 70% of credit reports include at least one negative comment in them. This article gives you some tips and ideas on the best ways to repair bad credit.
How Can You Repair Bad Credit?
After we cause damage to our credit our next step is to attempt to repair bad credit and rebuild our good credit. We can repair our credit using any of the methods listed below:
- Get Credit Counseling
- Hire Services to Repair Bad Credit
- Do It Yourself Credit Repair
If you follow the correct approach it is easier to repair bad credit on your own. Thus, the rest of this article assumes you prefer the third option above. Here are some basic tips to follow when doing your own credit repair.
Challenge Negative Entries
The first thing to try is to challenge your negative credit report entries to force a ruling about whether or not they are verifiable. If they can be found to be unverifiable the entries are eligible for removal from your credit report. The longer the time that has passed, the harder those negative items are to verify.
Time Is Your Ally
If the negative entry removal fails, you can attempt to negotiate those debts down to a payoff agreeable to your current financial situation. For collection services, the more time that passes without receipt of payments the less the debt is worth. Therefore, the longer a debt has been on the books, the better the chances that the collector will accept a lower payment amount to list the debt as paid. As you can see, time is your ally.
After you repair bad credit records you can begin to reestablish your good credit once again. Keep the following points in mind while you do this:
Limit Credit Inquiries
Anytime you apply for a credit or debit account the issuer requests your credit report from the reporting bureaus. These inquiries are added to your official credit report and are available to potential lenders. Too many such entries on your report indicate to them that you have a pattern of acquiring too much debt. This can raise a flag about your ability to pay them back if they make their credit available to you. Your ability to acquire new credit decreases as your credit inquiries increase.
Secured and Pre-Paid Credit Cards
For individuals with poor credit scores it becomes difficult to obtain new credit cards. Therefore, they are forced to apply for pre-paid debit cards or secured credit cards to meet their credit needs. Although no credit check is triggered with either of these applications only the secured card reports your payments to credit bureaus. Both of these card types require a deposit upon sign up.
Pre-Paid Credit Cards
The pre-paid card functions like a checking account debit card. Your account is debited as you make purchases until your funds are gone.
Secured Credit Cards
Secured credit card charges, on the other hand, are applied against your credit line but are not billed to you until the end of the month. Upon receiving your bill you can either make your minimum payment or pay the entire balance. An advantage of these credit cards is that your payments are reported to the credit bureaus. Therefore, if you make timely payments it will help to raise your credit score.
Observing the tips discussed here will help you repair bad credit and also assist to raise your credit score.
If you want to know more about credit repair visit Credit Repair Manual for more details.
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