Tuesday, February 5, 2013

Take Steps to Repair Your Bad Credit

The credit rating you have plays an integral role in whether or not you will be extended credit in the future following a bankruptcy.

The credit you seek could be anything from a credit card, a personal loan, a car loan or a mortgage. The important thing is that you want to be told yes as opposed to no by the creditor in question.

Bankruptcy will show up on your credit report and there is nothing you can do about it. Do not be taken in by credit repair companies that claim that they are able to completely erase a bankruptcy off of your record.

Most of these companies are scams that want your money and will give you nothing in return. In most instances, a bankruptcy will show up on your credit report for as long as 10 years.

Before you let any of this get you down, you need to hear the good news. Credit improvement is something that is within your control. The steps you take to improve your credit now can help to ensure that the loan or mortgage you want in the future will be granted to you!

What You Need to Do

In order to start back on the road to better credit, you need to see what creditors are seeing when they do a check on you. In other words, put your investigative skills to work and perform a credit check on yourself.

Check Out Your Credit Report

In the United States there are three credit bureaus. These include Equifax, Experion and Trans Union. Visit their websites or look up their 1-800 and find out what you need to do in order to be sent a copy of your credit report.

Although all three credit bureaus have files on you, they all communicate the information they have with each other. For this reason it is only necessary for you to contact one as opposed to all three.

Once you have your credit report in hand, look it over very carefully, perusing each and every entry.

If you discover an error in their reporting then get in touch with them with proof that a debt that is still showing as owing has been paid in full. You can also write a letter that gives your account of the story. Your comments can then be added to your report.

Pay Outstanding Debts

If there is any negative information on the credit report or if you still owe money to creditors then do whatever you can to fix it. If you have outstanding debts and cannot pay them in full at the present time then make an arrangement with the creditor(s) to pay in monthly installments.

Before applying for a mortgage or loan after bankruptcy, you need to pay down (or better yet, completely pay off) the debts you have.

When it comes to paying off debts, consider which ones have the highest interest rates and pay them off first. Once you have them out of the way then you can work on the ones with lower interest rates.

The sooner you can reduce your debts the better off you will be in terms of your credit report. Make sure that your monthly budget figures in repayment of each and every one of your debts.

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