" Effective Credit Repairing Measures "
By Somdev Mukherjee
The fact that your credit position is below par might get revealed to you via a shock when all of a sudden your application for some loan is turned down outright. This is indeed a frustrating experience. However, instead of despairing you need to work upon your finances and get going with adopting effective credit repairing measures.
You need to make sure first how bad your credit situation really is. For this you are to secure a copy of your credit report. Such a report as obtainable from the Tri-bureau i.e. the three credit bureaus of national significance (Experian, Equifax and Trans Union) will be containing the FICO score- a credit worthiness rating. This score provided by Fair Isaac and Company ought remain above 550 to be indicative of a normal healthy credit situation. If your FICO score is lower than this figure then you have bad/poor/adverse credit. In such case you need to resort to adopting the following effective credit repairing measures:
- The foremost measure that you need to take up is set up a family budget. A good family budget that includes calculated spending for day-to-day and other expenses so as to ensure lesser usage of credit cards will be a crucial credit-mending endeavor. The budget should have provisions for making timely payments towards the various debts and bills. The settlement of outstanding accounts and accumulated debts should be a prime concern of this budget plan.
- Close old credit cards that are no more in use together with the accounts associated with them. Then make sure of reporting your new account status after reduction in the number of credit cards to the credit reporting agencies. It is important that they take note of this while preparing your future credit reports.
- Request the creditors to lower the credit limits on your account. A real good way of limiting the amount you spend is to opt for a prepaid credit card.
- Take up credit reestablishment measures like co-signing on a loan or credit by a family member or friend and making timely payments here. Such measures will also help check the possibility of further credit damage.
- As a worthwhile measure maintain a secured credit card and keep some amount (that is sufficient to cover your charges) in this account. Make timely payments here to gradually reestablish your credit.
- Stay careful to avoid bankruptcies, tax liens and collections. These are the black marks that can lie in your credit report for long thus damaging your loan prospects.
Following such measures will hopefully help you overcome the stigma associated with poor credit rating. Remaining steadfast to these steps can, over time, even ensure that you become the holder of a bona fide credit report and loan makers vying with each other to convince you to opt for their products.
Somdev Mukherjee is a Kolkata (India) based writer of articles, short stories, poems and web content related to finance, mortgage, debt consolidation, insurance, laws and other topics of interest.
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