Today’s economy has generated tens of thousands of individuals with bad credit. An increasing number of people continue to lose their jobs, and it takes longer to obtain a new job. Each month that passes without paying ones creditor causes your score to go down. Without credit and no collateral to help secure approval for items you want. You'll need to have a very large cash reserve to acquire the items you need. And without good credit, you’ll find it very difficult to get employment!
If you have already got bad credit report, you realize the importance of improving your credit score. There is certainly companies which may charge you hundreds of dollars to help fix your credit. But for those willing to invest the time, do your research, read the appropriate books like Mastering Credit Repair. You’ll save yourself hundreds of dollars in expenses.
Below-average credit is usually a term used to explain a poor credit rating. A credit score is defined as a statistical method of assessing an applicant's credit worthiness. Making late payments, skipping payments, and exceeding card limits or declaring bankruptcy will damage your credit rating. Your creditors will report all of these actions to the credit reporting agencies. Your creditors will report late payment, nonpayment, and so on even if your non-payment of an account was on purpose or a result of financial hardship.
If you find yourself in a position where it's difficult to make payment to your creditor? You should contact them and let them know of your difficulty in making payment. Many lenders are willing to work with you on making payments. This can help maintain your credit rating until you are able to begin to making larger payments.
Raising your credit score is possible. It's a well known fact that lenders will give people with higher credit scores lower interest rates on mortgages, car loans and credit cards. You do not want your credit score to falls under 620. It can make it difficult for you to obtain loans and credit cards. An excellent source of learning how to fix your credit and improve credit score can be found in Mastering Credit Repair book found at http://www.creditrepairstrategies.virtualwebstores.com.
Listed here are some suggestions on raising your credit score.
1. Correct obvious mistakes.
Check your credit reports from all three credit bureaus for accuracy once a year. Changing an error on your report might take 30 days to a few months, or more.
2. Pay Your Bills On Time
Your payment history makes up 35% of the total credit score. Missing just one payment on can really hurt your credit score. Paying your bills on time will greatly help improve your credit ranking and score.
3. Reduce your bank card balances.
Your bank card balance needs to be below 25% of your credit line.
4. Don’t Close Old Accounts
Closing old or paid off credit account will actually hurt your credit score. Closed account will cause the remaining credit balance to be out of balance with credit score calculations. Closing your oldest accounts can
actually shorten the length of your credit history and to a lender it makes you less credit worthy.
5. Avoid Bankruptcy
Bankruptcy is the single worst thing you can do to your credit score. Bankruptcy will lower your credit score by 200 points or more. A bankruptcy on your credit record is reported for up to 10 years.
Repair Credit By Using Banks
Step 1
Contact 3 banks and find out what the minimum loan is that the bank can give out. The loan needs to be for more than 6 months. Then open a CD for that exact amount for a year.
For example, if Bank A minimum loan is $2000. Then open a bank Certificate of Deposit (CD) for $2000.
Step 2
Apply for a secure loan for the exact amount of the CD. You will be using the CD has collateral to secure the loan. Place the money from the loan into a saving account. Now every month withdraw money from the saving account to repay your loan.
**Do not use the cash borrowed for anything but to repay the loan.
Step 3
Repeart Step 1 and 2 for the next two banks.
**Remember that the loans have to be longer than 6 months for it to show on your credit report.
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