Rebuilding Credit: How You Can Go From Damaged to Stellar
Wednesday, February 4, 2015, 6:00 AM | Leave Comment
Banks and other lenders make credit issuance decisions based upon the character and past history of a potential borrower.
These lenders rely heavily upon credit scores as a means to quickly assess the character and creditworthiness of an applicant.
Because of this, your credit score holds a serious amount of weight when it comes to if you are issued a loan or not.
Unfortunately, there is no reliable way to quickly repair blemished credit.
Negative items on an individual’s credit file will linger there for seven years or longer.
The good news is that most credit grantors take into consideration the most recent 18 months of credit history when underwriting any application for credit.
Moreover; negative information that appears on credit files is not set in concrete. Some of it can be mitigated (explained) or permanently removed.
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First Steps toward Restored Credit
The very first thing one must do when undertaking a credit repair effort is to obtain a copy of their personal credit file.
All major credit bureaus will sell a consumer their file. Federal law mandates that credit bureaus provide consumers with a free copy of their credit report if they have been denied credit because of what’s on the report. This is something to take advantage of it ever denied credit.
Credit reports do sometimes contain errors. These errors cannot be corrected if a consumer is not aware of them.
Having access to your own credit file gives you the power to check for errors. Federal law enables consumers to challenge erroneous information on credit reports and have it removed.
If a credit bureau is unable to verify that certain information is accurate, then the information must be stricken from the record.
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Professional Guidance
Many people give up on the notion of using credit once they file for bankruptcy or run into some other form of credit trouble.
This is a mistake.
The modern world we live in makes the “cash and carry” lifestyle difficult to sustain.
Increasingly, credit has become a critical tool for sound financial management.
Wise decision making and the use credit as it was intended will go a long way toward helping the individual establish a positive credit history.
Those who don’t want to go it alone, or feel that they need a professional’s point of view are encouraged to seek the gentle guidance of an experienced credit counselor from Keith G Collins Ltd.
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Reestablishing Credit
The easiest way for folks with damaged credit to work to improve a credit score is to try to apply for secured lines of credit.
Some banks will permit borrowers to use their certificate of deposit accounts (CD’s) as collateral for personal loans without a credit check.
Banks know that these types of loans are guaranteed to be repaid. The benefit of taking out one of these loans is that a history of positive credit use will show up on future credit reports.
Another method of leveraging secured credit to garner some positive credit history is to open up a secured credit card account where your opening deposit amount becomes your new credit line.
Repairing one’s credit is not a quick and easy process. Oftentimes there are serious life changes that need to happen in order to make the necessary adjustments. Consider following these tips to get on the right track.
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