Clean Up Your Credit - It's That Important
If you fail to repay debt on time or renege on a loan, you will live with the effects for a long time and there is little that you can do to erase it other than wait for time to pass. However, under no circumstances get in to more trouble with repayment. Keep accurate records and use a reminder system to ensure that the current payments are made on time, If the creditor offers an automatic deduction system for your payment use it. Make sure your bank book record is up to date and if the lender has an online presence and you can access your account, do so daily.
If you run out of money before the end of each month, do not use credit cards to fill the gap. Rather establish a personal budgeting system and convert the data to a monthly cash flow plan with due dates. Stick to the plan and when you diverge analyze why and make immediate corrections.
Do not assume the credit reporting agencies always issue accurate reports. There are many mistakes made by the agencies themselves and by vendors and lenders who report your financial practices every single month. Get a free copy of your credit report from all three major agencies and check it carefully. Follow the suggested method of disputing a finding. From personal experience research your assertions and supply detailed photocopies of your documents. Send the dispute data by certified mail and send ca copy to each of the reporting agencies. Ensure that corrections are made to the record and insist that errors are circulated to anyone who has requested a report on you in the intervening period of the claim and the current report. This can be one of the most frustrating exercises in correcting bureaucracy but you must get it done and pursue it to a conclusion. Your borrowing capability and/or your interest cost will depend on the result.
Your good credit is a vital asset. If you are a borrower your capability to borrow and your borrowing cost are both dependant on the result Maintain a constant watch over your credit report and when it's bad, work on the factors that are causing the problem. While some will seem to take an age, if you begin now and keep at it, you will be rewarded.
When you plan to apply for a loan, you may want to consider face to face application with a local loan officer to explain the "bad credit" situation to her/him if they don't already know it.
|