How to Fix Bad Credit
What is bad credit? Here are tips on how to fix bad credit and bad credit repair advice to enable you to regain a good credit score.
Bad credit is a description used to indicate that there is a negative credit score or poor credit rating. Credit score is calculated using the FICO or Fair Isaac Credit Organization method. The number is between 400 and 800. A good credit score is 720 and above. A score below 580 is poor and having a 400 score means you are not credit worthy at all. Although some credit companies have different variations, it's around those numbers.
Your get a bad credit rating based on several factors and among them are making late payments, total number of debt carried per month, not making your payments and exceeding credit card limits. Financial institutions or banks will turn down your loan application if you have a bad credit score.
You can get a copy of your credit report by filling in a form or calling the agency in your country that maintain your credit score. If you are in the US, you can go to annualcreditreport.com and if you are a Malaysian you should go to Bank Negara Malaysia or the Malaysian Central Bank. Your credit report will show your credit history including your credit cards, home loans and other debt.
Here are a few tips and advice on how to repair and fix bad credit.
Use a bad credit repair company
Credit repair agencies claim that they can remove bad entries from your credit report. But before you pay for a credit counselor, check first if the company is reliable and not a bogus. A good credit repair company should help you improve your credit score. A credit counselor will help you outline a realistic program for consolidation, develop a workable program to fix bad credit and give advice on matters to help you repair bad credit.
File a dispute with the credit bureaus
If your credit report shows some errors, you can file a dispute with the credit bureaus. Errors do occur such as including credit cards that you have cancelled and failure to update payments that you have made. The Fair Credit Reporting Act or FCRA will instruct the credit bureaus to investigate any item on your credit report that you dispute. The bureaus have 30 days from the time they receive notice of the dispute to complete their investigation.
Negotiate with your creditor
Speak with your creditor directly to remove your bad credit rating. But before you do that, make sure that you only have one or two late payment to your account for them to consider. The other option is to make an agreement with your creditor on an amount that you will pay and the number of payments that you will make to settle your debt in full. If the creditor agrees, you won't have to pay for ongoing interest but the agreed amount. And as you pay them on time, your credit rating will improve and this will enable you to fix bad credit score.
Plan your debt settlement
If you are serious about repairing bad credit, you have to know exactly how much you owe your creditors and make a firm resolution to pay up. List down all your debt, the amount you have to pay for each and give yourself a deadline. Stop using your credit cards for purchases.
One of the best things you can do to enable you to pay your debt and avoid stress is to find a way to earn an extra income through your passion, hobby or knowledge.. There are quite a number of ways to make money in your spare time or during the weekends. You can find several suggestions and ideas on how to work from home by clicking on the link.
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