Credit Repair for damaged credit.

Credit Repair

We all know that bad things can happen to good people. Some of these bad things can damage your credit, even severely.

However, your situation, even bankruptcy, is not hopeless even though there are some individuals and companies that will like you to believe so (usually for their own self interest).

You must, though, be proactive and seriously engage in a diligent effort at credit repair.

This page is a must read if your credit has been damaged or compromised and is also a good read if you just want to improve your credit profile and raise your credit score.

The information below is specifically aimed at credit repair by arming you with sufficient information for you to rebuild and restore your credit.

Credit repair is not an overnight adventure, so be wary about anyone who promises a quick fix. It is you who must work diligently and methodically to restore your credit.

Start Your Credit Repair Today

Credit repair takes time but once creditors see that you are responsibly rebuilding your credit by prudently handling credit, they will be more favorably inclined to extend credit to you themselves.

Diligent efforts at credit repair not only get creditors to extend you credit but extend you credit at a better rate which can save you substantial sums of money.

In many cases it is like starting from scratch, but armed with the right information, you can devise a strategy to accelerate your credit repair and raise your credit score.

Below are some special tips to aid in your efforts at credit repair.

OPERATION CREDIT REPAIR!

The following are tips which you can start implementing immediately to start your credit repair.

• If you have existing credit cards, pay them off and just keep a very small balance upon which you must pay on a timely basis. Credit repair does not mean having no credit, just that you should be prudent with your credit.
• If you are delinquent with your payments and are still having problems with payments, call your credit card company and offer to make the payments you can afford to avoid the reporting of the delinquency to the credit bureaus.

  Avoiding them will not make them go away.

  You must make the minimum payment of this arrangement. Then pay off your credit cards as soon as possible.

• Don't close unused credit cards unless you lack the discipline not to overuse them. Having credit will help (but keep them very low) with your credit repair as available credit tends to raise your score.
• If you do close some credit cards, close the newer ones first so that you keep your longer credit history.
• Assuming that you are starting from scratch, you should open some new credit accounts. Major credit cards are better as opposed to store and gas cards. Open several, but not too many, and long before applying for a major loan like a home loan or a car loan. Use them but try to stay below 30% of your credit limit.

  When lenders view your credit file, they usually want to see any revolving credit not more than a small percentage of your gross income.

• Even so, don't open a number of new credit cards that you don't need to aid your credit repair by increasing your available credit. Also, a rash of new credit very quickly may actually adversely affect your credit score because they reduce the average age of your credit and a longer history is preferred by most lenders.
• However, once you have bad credit, getting new credit cards may be difficult. A good way to do this is start with a secured credit card where you open a saving account or Certificate of Deposit with that bank that is issuing the credit card and they give you a credit card which they secure with the deposit you made to their institution.

  Most will even extend you credit much higher than the deposit you made to their institution. But the deposit expresses on your behalf some good faith and seriousness in you intent and desire to repay.

• Do not do too much shopping for credit just a few months before applying for a loan. You do want to shop for the best rates, but do not overdue it.
• Always pay more than the minimum and always pay way before the due date. Never, Never be late. Timely payments do wanders for your credit repair.
• Always remember that your objective is credit repair and not using credit just to acquire stuff as it probably was the indiscriminate use of credit that damaged your credit and made credit repair necessary in the first place.
• Another good strategy for credit repair is through bank loans. But since your credit is bad, it is unlikely that they will lend you the money without security. So before you can get a loan, you need to deposit some money in the bank. (This strategy is good, not only for credit repair, but for those just starting to establish a credit history).

  Do this by opening a Certificate of Deposit (CD) for maybe 2 years. Then borrow 80 % of your CD, no questions asked, secured with your CD. You arrange to pay a fixed rate on the total amount of the loan over the life of the loan.

  You then take your 80% , go to a second bank and repeat the process, that is, open a CD, borrow 80% and secure it with your CD.

  Repeat the process with a third bank. Do this with 2 or 3 banks, no more.

  You then take the loan you took from the last bank, all of it, and pay it towards the first loan in the first bank. Don’t worry, even though your new loan balance will be greatly reduced, your credit report shows the original loan as the original amount borrowed and your loan balance a small portion of the loan borrowed. Great for credit repair!

  And for You? Your payment is based on the balance of your loan making it supper manageable.

  Illustration with $10,000.00:

  BANKS	DEPOSIT	LOAN: 80% OF CD
  1st Bank	$10,000.00	$8,000.00
  2nd Bank	$ 8,000.00	$6,400.00
  3rd Bank	$ 6,400.00	$5,120.00

  Now Take the $5, 120.00 loan from the third bank and pay to the First bank making your loan balance in the 1st bank $2, 880.00 (8,000 - 5120).

  You now owe 2,880.00 on which you are making payments but your original loan still shows up as $8, 000 in your credit report. And you are making all your payments on time. Your credit repair is on the fast track!

  Please note: This is a strategy specifically designed for credit repair, particularly laser beamed to rebuilding your credit and it is not an investment strategy.

  In fact, you lose a small amount of money for your efforts because you will be borrowing at a higher rate than what you will be given on your CD, but the rate still will be one of the best that bank offers because they are making money without assuming any risk since your loan is secured by your CD.

  This small loss is nothing in comparison to the tens of thousands of dollars you intend to save in interest because of your improved credit score if you were to get a home loan.

  For this strategy to aid in your credit repair, your payments must be reported to the credit bureaus. Therefore, before selecting a bank, you must inquire whether they will report your timely payments to one of the credit bureaus. Some do not. Rule those out.

• Other options which some sources recommend are to ask family or friends to co-sign for you in securing credit but we recommend this only if you couldn’t secure the loan yourself.

  Remember it is better to start small. Do not assume any undue risk. Remember, your objective is credit repair. In every case, you want make your payments on time, in fact, early.

• Be sure that whom so ever you secure credit from, be it your credit cards or bank loans, that the lending institution reports payments to one of the three major credit bureaus so that your improving credit profile will be accurately chronicled.
• More recent activities carry more weight than activities in the past and the further past you go the less weight is attached. So it is only you who have the power to repair your credit. And you have information that can put you on the fast track towards credit repair. .
• Do not fall prey to any offer of quick fixes to repair your credit for information that is accurately reported. Credit repair is not a quick fix despite the proliferation of companies promising instant credit repair. Buyer beware !
• Once you have taken these first early steps to rebuilding your credit, you may want to make these changes permanent in the way you manage credit.

  Just like weight loss programs where the majority of people who loose weight put the weight back on if they fail to make lifestyle changes, you must make permanent changes to the handling or management of credit so you do not fall back into bad habits and again damage your credit score.

• You must also regularly monitor your credit report to ensure that the correct information is recorded. This can affect your Fico score. It is OK to request and check your own credit report as this will not affect your credit score.
• Generally, having credit cards and installment loans that you are making timely payments on will raise your credit score. In fact, managing these payments responsibly is viewed far more favorably by lending institutions than some one who has no credit cards and installment loans.
• Ultimately, the credit decision is made by the lender. She considers your employment history, amount of debt you currently bear and how you make your payments, and whether your salary is sufficient to carry the new loan if offered. However, your Fico score and how you have handled debt, especially recently, is given enormous weight.

  So be aware that although lenders want to see a long credit history, your recent credit history carries far more weight than distant past credit history.

• In the end you will find your effort at credit repair paying off as creditors become more inclined to offer you credit and at better rates.

  Be patient and do not loose sight of your strategy and objective. Your objective is credit repair and you will enjoy the fruits of your labor. Another reminder that credit repair takes time but YOUR GOOD CREDIT WILL BE WELL WORTH IT!!

A lender does not know you, but your credit score provides her with a snap shot of you. After all your effort at credit repair to restore or improve your credit score, it is your responsibility to ensure that the correct information is reported to the credit bureaus because it is this information upon which your credit score is based.

Monitor your credit file on a regular basis and always before a major purchase like a car or a house.

If you query an error on your credit report, the credit reporting agency must investigate and respond to you within 30 days. And if there is an error, they are legally obligated to correct it.

You can request a copy of your credit report for a fee directly from the three major credit bureaus listed below:

Equifax: (800) 685-1111

Experian (formerly TRW): (888) 397-3742

TransUnion: (800) 888-4213

AFTER CREDIT REPAIR

After your have succeeded with your credit repair, do a least two things.

• Establish an emergency fund of between 3 to 6 months of your living expenses. You do know that bad things can happen and they usually do except no one knows when.
• Start an investment program where you put away on a monthly basis at lease the amount of interest payments you saved from paying off your revolving credit.
• Real estate has been a time tested and superior investment.

  Click image for

  Land in Lehigh Acres, Florida is an affordable means of investing.

  However, getting in quickly is important as land prices are getting ready to explode.

More information to assist you with good investment information will be added to this web site shortly. So keep checking.

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