Category Archives: Credit Repair Tips

Consolidating Credit Card Debts Is Part of Credit Repair

Overspending is an easy mistake that many people make. That’s because people feel that as long as their credit is approved, they can keep adding to their credit until it maxes out. You just can’t keep it up, because you eventually won’t have the money to pay for what you purchased. Consolidating credit your card debts can be a good first step towards repairing your credit.

Overspending with credit is not just happening in the US, it’s now worldwide.

Credit card consolidation is actually quite easy. You simply combine all the debts you owe to various creditors, so you end up paying just one creditor every month.

There can be many benefits to credit card consolidation.

First, you often can pay off your debt at much lower interest rates than what you were paying.

Once you consolidate all your debts into one, you will re-age your account. That means that your account becomes current and active so long as you keep making the payments you agreed on.

Whereas card companies charge you late fees when you are late on your payments, most credit card debt consolidation programs waive late fees, so you only pay what you actually owe.

Debt consolidation plans buy you time so you can choose whether to finish paying in a few weeks or spread it out over months.

Once you consolidate your credit card debt, you next need to get the money to pay it off. You should work to reduce your expenses as much as possible. You could also try asking for a raise, or get a second job, or sell off some things you own.

You can apply for credit card consolidation through a bank, or you can go to private and non-profit organizations that offer similar services. Search for the right one to work with and then work with them to consolidate, then reduce your debt.

While looking for an organization to work with, check on them before signing up, because there are a lot of scams.

Once you start reducing what you owe, you’ll feel much better and it soon you’ll be able to repair your credit.

One good way to repair your credit is to work to improve your credit score. You can try to open new lines of credit, and if the big credit card companies deny your application, get a credit card offered by a local supermarket, grocery store or major department store chain. You can also try through your banks. Always read the fine print, because some credit cards have high fees and interest.

Then, try to pay your bills on time, because all that hard work you did to improve your credit will go to waste if you miss a payment.

The debt you owe to creditors took a long time to grow, so it may take a while before you get debt free. Remember, you created this situation yourself, so you only have yourself to blame.

Of course, credit card consolidation is just one part of credit repair. Once you start it, keep working on it, because that is the only way you can improve your credit score and again get good standing with your creditors.

Why is Credit Repair so Important

Your credit score is what banks, lenders, landlords, and others use to check whether they want to OK your purchase, loan, apartment rental, or job application. You can be approved or denied based on your credit score, and that’s why your credit repair is so important.

Credit repair is absolutely necessary if your credit score is 600 or below, and still very useful at almost any level. So you can understand how your credit score is calculated, everybody starts with a reasonable score but the instant you are late on a payment or a mortgage, your credit score drops.

This doesn’t necessarily mean you won’t be able to get a loan, but you will probably get an interest rate that is much higher than someone who has a better credit score.

The best way to fix a low credit score is by paying off old debts, contesting errors on your report, and not missing any more payments.

Fixing your low credit score normally can’t be done overnight, but usually takes at least several months or even years.

Bankruptcy shouldn’t normally be an option, unless you have a pending foreclosure or need to stop collection on a judgment, because your bankruptcy record will be kept on file for 10 years.

Of course, you can’t repair your credit unless you know what to repair. That;s why you first need to get a copy of your credit report by obtaining this from one or all of the three credit agencies, which are Equifax, Experian, and Trans-Union. You can get a free credit report from www.AnnualCreditReport.com, but buying a 3-in-1 report can make it easier to see all the reports all in one report.

As soon as you get the credit report, review it for errors. If any issues show on the report that have been resolved, send a letter to that credit agency with evidence of what happened, so your credit report can be corrected.

If you have outstanding balances, you need to make sure your payments are current or early, or pay them off to get a settlement letter which you can supply the credit agency, so they can correct the issue. Be careful not to close too many accounts, especially older ones, because that can also negatively affect your credit.

Meanwhile, you have to make enough money to make your payments on time or early. You can often get better terms by consolidating your debts into one package, which should buy you a little time at lower interest rates.

Some people borrow a little money to make their payments current, while they work on fixing their credit report, because your credit score may improve if you apply for a loan. You don’t need to borrow much because even a small amount like $500 can be enough to start some improvement. Of course, make sure that you make all payments completely when due or earlyl.

Hopefully, you now have a clearer picture of why credit repair is needed. You might have avoided the problem if you had understood how it works earlier, but what’s important now is just to move forward and repair the damage done..

Credit repair can be simple once you understand how to do it, but don’t be afraid to get help from a credit counselor at the beginning. Hopefully, you’ll get your credit back in good standing soon and you can again get a line of credit.

To prevent the need for credit repair again, keep your expenses down and try not to spend beyond your means.

When You Need Credit Repair

You need credit repair especially if your credit score is less than 600 points, because your credit score can make may things impossible, like getting a loan, renting an apartment, getting a job, and many other day-to-day activities.

If your credit score falls really low, don’t panic because you can fix it. Don’t even think of filing for bankruptcy, unless you need to stop a foreclosure or stop enforcement of a judgment, because a bankruptcy will lower your credit score and will be on your record for 10 years.

Credit repair is easy if there are any mistakes on your credit report. You can check your credit reports by getting a copies from one or all of the three credit agencies: Equifax, Experian, and Trans-Union. You can get free reports from all three at www.AnnualCreditReport.com or you can buy a 3-in-1 report that shows all three in one report.

Once you have your credit report(s), check them for errors and conflicts. Sometimes one agency will report some things differently than the others. That should be easy to correct.

If you are sure that an issue has been resolved, ask the agency to change it with a letter and evidence to prove your point, and they usually will correct the error.

But what do you do if the credit report is accurate, yet negative? You can still contest old debts, you can start making payments on time or early, and you can pay off some debts, if possible. If you need help, talk to a credit counselor who can even act as a negotiator and may be able to consolidate your debt at lower interest and easier payments.

Any debt consolidation package must in writing because it is a legal contract between you and the creditor. . The contract can avoid problems in the future, like if the creditor decides to cancel the agreement.

Once you consolidate your debt, you need to come up with the money to make the payments on time or early, and that usually means cutting your expenses and/or increasing your income.

If you can’t cut expenses enough or increase income, you may need to sell off some of your valuables or find a friend or family member can temporarily lend you the money.

Whenever you pay off a debt, make sure you get a settlement letter from the creditor and send a copy of it to all 3 credit bureaus so they can update your credit report.

There are several lessons to learn after you have repaired your credit.

First, keep your expenses down. When you get credit, don’t max it out, because it’s hard to pay it back.

Second, pay more than the minimum, to get the balance down.

Third, if you can’t do it alone, ask for help, because there are lots of credit counselors ready to help, some may be free.

Fourth, pay your bills on time or early and in full.

Credit repair wouldn’t have been needed if you had been more careful. So work to fix your credit, then keep it up.

Tips on Credit Repair

Credit repair is fixing errors in your credit report, making payments on time or early, and doing anything you can to raise your credit scores. Bad credit makes it difficult to get loans or to get loans at better interest rates and terms, and it can hinder you from renting an apartment, getting a job, or even buying some things.

First you need to see what’s being reported, so get a copy of your credit reports from one or all of the three credit agencies: Equifax, Experian, and Trans-Union.

Scour your credit reports for errors, then send a letter to each credit bureau for each creditor that has supplied erroneous information, and send any evidence you have.

When the credit report is correct, you have to work to improve your credit scores by making payments on time or early, and paying down your balances. Sometimes, you can talk to your creditors and get them to give you a deal allowing you to pay what you owe in easier payments. Another way is to consolidate your debts into one loan, with lower interest, so you have lower total payments.

If any creditors agree to this, make sure you get it in writing, so you have proof of the terms, in case they argue later..

If you have problems talking to creditors, you can hire a credit counselor or credit repair company to act as mediator. Credit arrangements can offer a lot of benefits like lower payments and lower interest.

Credit repair usually takes time and you should be ready to make sacrifices and cut your expenses. If you aren’t earning enough, you might have to sell some of your valuables and assets.

Sometimes it’s hard to pay loans, when you still have to pay for other things like a mortgage, utilities, food, transportation, insurance and other bills. You have to take care of everything at once, so it’s hard to focus on credit repair, but you really don’t have a choice because the situation will never get better unless you work on it..

While you’re repairing your credit, you can still use your credit card, but you should try to pay off new purchase at the end of the month, and cut down the balance, if possible. Just make sure you don’t max it like before, and try to reduce the balance every month, because your total debt contributes about 30% to your credit score.

Once you improve your credit score, keep making payments on time or early, whittle down balances, and keep your expenses down, so you have extra money for credit repair. Sometimes, applying for either a department store credit card or a secured credit card can improve your score.

Unless you house is about to be foreclosed on or you’re levied for a judgment, filing for bankruptcy is not a good option for credit repair. because the bankruptcy will stay on your record for 10 years and meanwhile, interest will accumulate and what you owe will just grow.

The credit repair tips mentioned above are simple to follow. Once you correct your credit reports and start paying down your debt with payments on time or early, keep working at it and you’ll soon see the benefits.

So, get your reports to analyze your situation, then work to make payments on time or early and pay down balances, so you can get better credit, then make sure you don’t make the same mistakes again.

How to Write a Credit Repair Dispute Letter

A Credit Score of 700 or above is considered good credit. If your credit score is below 700, or especially if it is below 600, you should work to repair your credit, because otherwise, you will pay more when you get a loan or buy things on credit. If you want to raise your credit score, you need to learn how to write a credit repair dispute letter.

Before you can write your that letter, though, you first have to get a copy of your credit report from one or all of the three credit agencies: Equifax, Experian or Trans-Union. You can get Free Credit Reports from all 3 Agencies from www.AnnualCreditReport.com or you can pay for a 3-in-1 report that shows results from all 3 agencies side-by-side on one report/

After you get your reports, review them carefully and check for errors. Write a letter to each of the Credit Bureaus, stating what is wrong and why, and include any evidence you have.

Write one letter to each bureau for each creditor that you find an error for. Don’t lump more than one creditor into one letter. Dispute each claim individually, so the credit bureau won’t think you’re faking it. After you send a letter, wait a couple of days to send a letter to that bureau for a different creditor, but you don’t have to wait for a reply before you send the next letter. Just separate them so each claim is handled separately and delicately, so the bureau can individually investigate each matter.

Then, give the credit agency some time to contact the original creditor and then either correct the mistake or tell you that the creditor doesn’t think there is an error. The credit bureau will conduct a investigation before they send you a reply. To facilitate their investigation, always explain what’s wrong and send evidence, if possible, when you write your dispute letter.

Oddly enough, hand-written letters may look better to them than typed letters.

You’ll often get better results if you use strong words like erroneous, outdated, misleading or unverifiable. You actually don’t have to explain in detail why you are complaining because the evidence and their own investigation will show the error.

If you’ve never written a dispute letter before, you can search for some samples, then you can change the name, the date and the details to fit your situation.

Just mail your credit dispute letter by the postal service and just wait. Usually, it takes just a few weeks for the credit bureau to evaluate your situation. If their investigation shows you’re right, you’ll get a new credit report in about 2 to 4 weeks, and your credit score should be better.

In 1970, the Fair Credit Reporting Act (“FCRA”) by the FTC was put into law to allow people to dispute wrong data on their credit report. If you think the report is reporting wrong information, don’t just accept it but force the bureau to change the erroneous information.

Now that you understand more about how to write a credit repair dispute letter, go and get copies of your credit reports and then review them and correct them if they are wrong, so you can start to improve your credit rating.