The Lifestyle of Good Credit: 7 Ways to Repair your Credit

Written by  //  April 5, 2014  //  Uncategorized  //  1 Comment

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Maxing out your credit card as you shop and paying bills late may seem like a harmless habit, but it is not. What’s the big deal if you pay late as long as you pay, right? Wrong. Many consumers do not consider the underlying impact of poor credit management until it eventually bites them in the hand. Having bad credit leads to higher interest rates on your mortgages and credit cards. This may not even be a problem as it is not uncommon for banks and other lenders to deny loan applications to people with bad credit backgrounds.

On the other side of the fence, there are good credit consumers. People who get easily approved for a car, house, credit card, and contracts they desire. They even get perks on some bundle deals and they enjoy cheaper interest rates on their loans. How does one join this particular group? Here are 7 ways to repair your credit.

First, consider partial settlement payments. If your lender agrees your proposition to pay parts of your debt, make sure the agreement is recorded in writing. If he/she refuses the proposition, record it in writing as well. Once the debt is fully paid off, the next phase is to send the documents containing the signed terms of agreement and completed settlement to all three of the official credit bureaus – Trans Union, Experian, and Equifax. Once the documents are received and verified, each bureau should update your credit score automatically.

Second, maintain a gap between the amount of credit you use and your available credit limit. Banks and other lenders like to see a wide gap between these two. Get your credit card balance at least under 30 percent of the limit on your card. This creates a 70 percent gap between the credit card balance and its given limit.

Third, get new credit. Once you’ve cleaned the slate, work a fresh start by adding positive information on your report. Timely payments boost your credit score as much as late payments hurt it. You should not become fearful of using credit options and discard them entirely. This simply leads to a stagnant and equally unreliable credit status.

Fourth, if your application is denied, try to apply for retail store credit like Macy’s. These established businesses have a reputation of approving people that come from poor credit background.

Fifth, be careful of what accounts you close. Do not sacrifice those with good balance for accounts that are in the red zone.

Sixth, continue learning what factors impact your credit score. This way, you can avoid the mistakes and become a smarter borrower and consumer.

Last but not least

distribute your disputes over a predetermined period of time. If you are paying off several lenders, prioritize those with the largest outstanding credit and have the highest interest rate building up. Also know that you do not have to take on your credit disputes and and late payments alone.

You can seek out companies like  http://www.creditrepair.com/reviews and other businesses that can provide you with help on your late payments and disputing your credit balance.

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