Guide to repairing your bad credit rating
Good credit can mean the difference between getting a car loan, home loan or any other type of loan. Some companies, most common, auto loans, offer loans for bad credit risks, but the interest rates are very high. Credit ratings tell the banks and lending institutions how you pay your debts. If you have had a financial difficulty, or job loss, paying bills late or not paying them at all will reflect on your record.
Understanding Bad Credit: With Merrilyn Mansfield – Princeville Credit Advocates
Increasing your credit ratingRevolving credit is usually a great way to increase your rating. This works if the balance is kept below the limit, and the monthly payments are in full, and never late. This can be accomplished by having a credit card, or charge card.
If your credit is seriously flawed and you cannot get a credit card, there aren’t many other options available.You can apply for a secured credit card, which means that you open a savings account with the company and you get a card for as much as you deposit. In other words, deposit $300.00 and your limit will be $300.00. These are high interest credit cards, but they do help you establish good credit.
Considering a credit repair service
There are companies that help you repair your credit rating, and charge fees to do so. They offer a free no obligation phone consultation, and can tell you how much they can do for you, and the costs involved.
They work by getting adverse events removed from your credit. Whether they are outdated, incorrect, duplicates or any other item that should be removed, these services will be able to renegotiate on your behalf and each removal increases your rating. Remember, if you do sign up with one of these agencies they will advise, do not apply for credit or loans during the time they state they will work with you, generally at least a year. Each application appears as an inquiry on your credit, which causes even more negativity.
One step at a time
Patience is the key to credit repair. Although you can do the work yourself to repair your credit, it may take longer than using a credit repair service. It entails contacting your credit reporting agencies, one by one, writing letters to dispute items on your credit report, and waiting for the response letters.
Doing your own credit repair
If you just cannot afford a credit repair agency, the first step on the road to repairing your credit is to obtain your credit report, and review it with attention to detail. Look at every line and make notes.
Each item that is questionable, or duplicated should be listed in a letter to your credit-reporting agency. Going to the website of say, Veda, will give you an example of how to dispute credit listing on your credit. Some even offer online credit disputes.
Once you list all of the discrepancies, send them to all of the credit agencies that report credit. There are a few in Australia:
Each receives about the same information, however you need to contact all three individually to have anything removed over all three agencies.
Implement sound practices
In the meantime, keeping your credit clean, and not charging or adding inquiries or other credit discrepancies is seriously important. Not to mention that any additional work will cost you more with your credit repair agency.
Some tips to do this is to live within your means. Don’t charge everything, and make a plan or budget to start paying off debt.
Be patient – this process takes a lot of time, but once your credit is ‘gold’ again, life will be great. You can buy that house, or car you’ve always wanted with the most competitive possible interest rate available.Back to top