Difficulty making repayments will lead to an adverse credit rating. Rebuilding bad credit isn't something that happens overnight, but it is possible for the consumer to fix credit problems by proving that they are a reliable payer. This article will provide credit repair help so that a consumer can qualify for loans, credit cards and mortgages after default, delinquency or even chapter 7 bankruptcy.
Pay Reliably to Rebuild Credit Ratings
It is possible to gradually fix credit problems by paying back any money owed on time now and in the future. Lenders report to Experian, Equifax and TransUnion (the three credit reference agencies) each month. Even after filing chapter 7, many consumers still have active credit agreements. Each repayment that is made punctually will help in terms of rebuilding bad credit. It may be possible to qualify for a mortgage after bankruptcy in less than three years. Pay late and the whole process will have to start again.
Rebuilding Bad Credit with a Credit Repair Credit Card
In order to get a better credit rating it is advisable to make repayments on a car loan or mortgage and a form of revolving debt, such as a credit card. Secured debt (mortgages, car loans etc) cannot be cleared so will remain active until paid off or repossessed. A poor credit history credit card could provide a form of revolving debt if unsecured debts were eliminated by bankruptcy. A FICO score is made up of different parts so a credit card for bad credit could form an important part of credit report repair.
Credit Repair Help with Credit Report Errors
A surprisingly high number of credit reports contain erroneous information. The Fair Credit Reporting Act gives the consumer, or an appointed credit repair attorney, the right to correct any inaccurate data. This is very important because lenders are unable to distinguish between incorrect data and poor credit. It is vital that the appropriate supporting information is provided so that the process isn't held up.
Fix Credit Problems by Closing Obsolete Accounts
An easy source of credit repair help is to close down inactive sources of credit. The exception to this rule is old bank accounts as these can be of help. Old store cards, credit cards etc will assign a certain amount of credit so closing these down means that more credit can be allocated in the future. Creditors don't like to see inactive or obsolete sources of credit as it indicates that they may be wasting their time and money approving a new application.
Avoid Multiple Applications to Maintain a Better Credit Rating
Every time a customer applies for credit, a search will be recorded for a period of 12 months. Whilst lenders expect to see a reasonable number of searches, having too many is likely to be deemed an indication of financial difficulties or potentially fraudulent activity. In order to avoid unwanted credit problems, apply for loans, mortgages and credit cards sparingly. Perform plenty of research at comparison sites and only apply for financial products that are likely to be approved.
Credit Repair Help Following Divorce
If a former partner has a history of adverse credit, any joint credit agreements will have a knock-on effect for the ex's credit score rating. For example, an active joint mortgage or loan agreement. If a former partner has bad credit, remove that person if all joint credit agreements have been cleared or paid off. This could fix credit problems far more quickly, but it won't be possible if an agreement is still active.
Asa Ghaffar - Asa has over 10 years of practical experience in loan approval, secured lending, bad credit repair, stock trading and debt management.
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