Bad Credit RepairHow can you repair your bad credit?Bad Credit can happen due to a variety of reasons. It can be due to an unfavorable county court judgment or the payments that he/she has defaulted or delayed in an earlier loan term, or something beyond the control of individuals such as divorce or redundancy. But, irrespective of the cause, the end result will be a damaged credit rating, technically rendering the person 'not trustable' for financial deals in the eyes of most banks and lending institution.So is there any way out of this mess? The answer to this question is YES. There are two ways by which one can shrug off this bad credit tag - either improve the credit ratings over a period of time through conscious and ordered effort or wait till the end of 7 years when the existing credit scores becomes expired or invalid and the cycle starts once again. From a practical point of view, in all counts, the first method makes more sense and it is the present topic of discussion, Bad Credit Repair. The easiest way to repair one's credit is to gain the trust of banks or lending institutions by paying back the loans in time, punctually. If the applicant could manage to payback the terms for 2 years in a row (say), it will go a long way in improving the borrower's damaged credit score. If one is carrying a number of credit cards, cancel few of them after paying all the dues and report the status to the credit agencies. Even if one is reeling under severe debt, avoid bankruptcy. Also it is no-no to collections and liens. It should be kept in mind that bankruptcies stay on the credit report for as long as 10 years - even more than the life of normal credit scores, while paid tax liens and collections show in the report for 7 years. In the case of unpaid taxes, the damage is virtually permanent. It will continue to haunt for long. Consolidating the loans is also a good option, but make sure that one gets the consolidation loan at a lower interest rate. Having a trusted friend on the borrower's side to cosign the loan or credit card will aid in securing a loan at lower rates. But, always take care to make the repayments in time. Else the entire arrangement will backfire, driving the credit scores further down the slump. It is also a good option to contact any of the credit repair clinics for professional support. But make sure that one is contacting the right credit repairing agency. Finally, on a safer side, request a copy of one's credit report from the credit agencies. It is possible that some bad credit may be due to an inadvertent mistake that might have crept in during tabulating the report. Tail Piece: While getting a friend or relative to cosign a loan or credit card, it must be understood that any default made by the borrower in the repayments could affect the cosigner's credit rating as well. Hence, if one is not sure of his/her repayment ways, better don't drag another person as well into the already troubled waters. | |