True Credit Archives

3 Tips For Quick Credit Repair

Quick credit repair is what you need when your credit score is low. If you want any kind of a loan, you will need to do something about your score. Even if you don’t need more credit right now, it is good to start repairing your credit as fast as possible. The sooner you start, the sooner you will improve your credit rating … and you never know when you might need it!

So here are our three tips for quick credit repair. Follow this advice and you will be on the way to improving your credit rating in the minimum time.

1. Know Where You Stand

The first thing to do when you want to boost your credit score is to know exactly where you stand. This means sitting down with a piece of paper and writing down all the amounts that you owe along with the monthly payments that you are making on each debt.

You will also want to work out approximately what you spend per month on essentials like food, rent, power, personal care, car maintenance and gas. Build in something for your social life too. Those are your minimum monthly expenses.

Now add your monthly payments and your minimum monthly expenses. That’s your spending budget.

Next think about your income. Is it more or less than your spending budget? If it’s more, quick credit repair should be possible as long as you do not spend money on unnecessary things. But if your income is lower than your budget, you will need to think about reducing your budget or increasing your income.

2. Pay On Time And Pay Plenty

One of the most important things you can do for quick credit repair is to pay your bills and repayments on time. Most companies give you about 3 weeks before they consider the payment overdue. Make sure you pay during that time. Late payments set up a red flag that looks bad for your credit history.

Try to always pay at least the minimum amount due on your monthly repayments, and more when you can. If you make less than the minimum payment, that is a red flag too and may make your score worse rather than better.

If you can pay a few dollars more than the minimum payment each time, go ahead and do it. This looks really good from the point of view of the credit company and will also help you pay off your bills faster. This is one of the best things you can do for quick credit repair.

3. Resist Offers

When you are trying to repair your credit score, you don’t want to start spreading your debts wider or reducing your payments. So if the credit companies start offering you some kind of a deal where you extend the loan for a longer time, just say no thanks.

They may offer you either lower payments or a time when you can ‘legally’ skip payments. Either way, it will not help your credit score. Resist the temptation if you want to improve your credit history and achieve quick credit repair.

How to Handle Derogatory Credit Information in Your Credit Report

The derogatory credit information section in your credit report lists all the items that negatively affect your credit rating. It is this section that is given the most attention by creditors and lending agencies.

The most damaging types of credit information are bankruptcies and foreclosures. These items can be reported on your credit report for up to 10 years.

The second most damaging types of credit information are accounts that have gone to collections. Any account sent to collections affects your overall credit score in the worst way.

A collection account can stay on your report for seven years from the date of last activity In actual practice, collection accounts are often sold to another agency at the end of the seven year cycle, which creates another activity, which means the seven year reporting cycle starts all over again.

Other derogatory information in your credit report includes accounts that show a slow payment history and/or past due accounts. Unpaid student loans, judgments, and unpaid medical bills also show up here.

How to Handle Derogatory Credit Information

Derogatory information can be disputed when it is inaccurate. If, for example, you can prove you made a payment on time, when it has been reported otherwise, you should be able to have the error corrected.

Disputing errors is done by sending copies of your documentation to the credit bureau via certified mail. Once the agency receives the dispute, they must contact the lender for verification of accuracy. If the lender does not respond to the dispute within 30 days, the credit bureau must assume your dispute was accurate and remove the disputed item from your credit report.

A way to handle derogatory credit information in your credit reports when the lender will not remove it is to send a written explanation of the circumstances regarding the item. You are allowed by law to submit a 100 word explanation of the problem to the credit bureau, which then becomes a part of your credit report.

The derogatory credit information section in your credit report lists all the items that negatively affect your credit rating. It is this section that is given the most attention by creditors and lending agencies.

Bob Pering writes about credit repair, debt management and personal financing solutions. Special emphasis is given to the problem of derogatory credit histories in credit reports and what you can do to legally repair or erase them.

Visit my website at: http://BadCreditEliminated.com/ for tools, tips, suggestions and ideas on how you too can quickly improve your credit scores.

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How Does Accelerated Debt Consolidation Work?

Accelerated debt consolidation can help you to get out of trouble when you have become swamped with debt and are struggle to manage all of your monthly payments. If you are having difficulty in making the required minimum payments each month, or have even ended up missing some of them, then you probably could use some help.

Debt consolidation takes your existing debts and brings them together into one large loan that will have an interest rate lower than the combined rates of interest you have to pay now. This will make it easier to make your repayments and it can also take less time to pay off completely. If you have many debts at high interest rates, this can be a sensible move to make.

There are two types of debt. Unsecured debt, usually a personal loan or credit card, does not require any collateral as a guarantee. Some sort of collateral, such as a property that you own or some other asset, guarantees secured debt. Common secured debts are mortgages and car loans for which your house and car are collateral. Collateral can be repossessed by your creditor should you fail to make repayments.

The accelerated form of debt consolidation works in the same way as the ordinary kind, but it only consolidates unsecured debts. Generally any secured debts you may have will be ignored.

The first thing that your financial counselor will do, should you take on the services of a debt consolidation firm, is to divide your loans into secured and unsecured loans. They will then work out a new repayment plan for your unsecured debts, which they will agree upon with your various creditors.

Accelerated consolidation is a good route to take if you have poor credit and are in difficulties with large debts that are growing due to high interest rates. The accelerated consolidation will be able to help you get rid of your unsecured debts, which are usually smaller than secured ones. They formulate a plan that allows you to repay them as quickly as possible. Large interest payments are often required on unsecured loans too, so it would be a good move to get rid of them as soon as you can. Interest rates on credit cards commonly range from ten to thirty percent and a personal loan could be accumulating interest at a rate of about twelve percent.

If you do decide to try accelerated consolidation, you should make sure you understand exactly what it entails and determine if it is right for you. It is generally suited to people who are in urgent need of help and have to get their debts under control as quickly as possible. If you try to consolidate all of your loans, secured and unsecured, you will be making plans over a much longer repayment period. You may not need to do this. Once you have cleared your unsecured loans, you may find that your payments for the secured debts are manageable.

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More Borrowers Pay Credit Cards Before Mortgages

It’s exactly the opposite of the norm. Usually cash-strapped Americans during tough economic times will miss credit card payments before they’ll miss mortgage payments.

Welcome to the new world order.

The percentage of borrowers who are delinquent on their mortgages but paying their credit card bills on time is growing, to 6.6 percent in the third quarter of 2009 from 4.9 percent in the same quarter of 2008, according to a new study by Chicago-based TransUnion. In an interview with Reuters, the author of the study, Sean Reardon, confirmed, “This goes against conventional wisdom and that has always been that, when faced with a financial crisis, consumers will pay their secured obligations first, specifically their mortgages.”

While concerning, I don’t find this surprising at all.

Today’s consumer is all about cash-flow, and that means keeping the credit cards current. A home is no longer the product it was even five years ago, no longer an emotional investment. For a growing number of borrowers, a home is now a financial investment plain and simple, and more and more often, a lost investment. I read an article a few years ago about how Americans’ attitudes toward their homes was changing, how twenty years ago losing your home was as big a social stigma as it was a hit to your credit rating, even more so. Not anymore.

Let’s face it: An awful lot of borrowers out there put nothing into their homes and therefore have neither a financial, nor, more profoundly an emotional nor social stake in the structure. Of course they’re going to pay off their credit cards first, because that has an immediate impact on what they can and cannot buy and do.

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