EasyBadCreditRepair.com

Bankruptcy does lead to a crippling situation. Assets are more likely to get washed out and debts will still haunt you years after. Next, you will observe that after bankruptcy proceedings your credit standing drops to God knows how low. But hey enough with lingering on your dread, it’s time to pick yourself up from the slump your in. Think your bankruptcy as a major reboot, a fresh start to rebuild and to live wisely. There are ways to get oneself credit repaired after bankruptcy. It all takes a major unlearning of bad habits and a few learning of good ones.

Change Your Bad Habits

First thing that you have to unlearn are bad habits. Overspending is one big mistake that many people are fondly tempted to commit. I remember an alarming news in the past where credit cards companies are targeting college students. The consequence is mounting debts for a no-wage earning adolescents. Even earning professionals are not exempt from making poorly thought of decisions. Impulse buying can be so damaging. The remedy is to plan out your monthly expenses and sticking to it. Setting aside 10% of your income as savings can be a source of emergency funds or become a tool for you to buy assets in the future.

Next rule to learn is “study and examine all investment ventures”. Majority of foreclosures occurred because of bad investment decisions. Many had been enticed by sub-prime lending, which many people can sustain under a healthy economy. But when recession crept in and brought job loss and skyrocketing interest rates, that’s when the investment collapsed.  The most hurtful part comes when the property was acquired thru a loan. It ended with people losing their asset and gaining more liabilities with the bank. The lesson here is never enter into a volatile investment using borrowed money.

Third, ants teach us a valuable lesson of having contingency plan during tough times. Job loss wouldn’t have been too difficult if there was about 6 months worth of savings set aside to tide one’s way until you find another job. Ants teach us to save up for the rainy day. Maybe one should learn from that moving forward.

After learning from your mistakes, it’s time to get oneself moving to getting your credit worthiness back up. Bankruptcy does deliver such a huge blow to your credit score and it sticks on your credit report for years. However, this is not a dead end but just a temporary road block. You could get credits after a bankruptcy.  Here are the ways to reestablish your credit worthiness.

Being informed at the rudiments of credit scoring is a powerful tool. Knowing the considerations to generate your score puts you at the advantage as you would know what efforts are needed to get your score up.

“Payment History” forms 35% of your credit score. That means you have to start and continue to be a faithful payor to your creditors.

“Amounts Owed” is weighted to be 30% of your score. You should at least keep your outstanding balance to the least possible amount. The higher one’s outstanding due the lower the score.

“Length of your Credit History” forms 15% of your credit score. The shorter you are able to repay and close the loan the better it affects your credit standing.

“New Credits” are recently approved loans or credit lines. Having just a few would be best. 10 percent of the credit score is taken from this category.

“Types of Credit Used” is about the credit variation you are involved with. A mix of secured credit cards, student loans and extra loans like buy now pay later increase your score. This category forms 10 percent of your credit score.

What To Do After Bankruptcy

Now how do you work on these categories? First, get a secured credit card with a nominal interest rate. Since Bankruptcy will prohibit you possessing an unsecured credit card, a secured credit card will be your tool to work on all factors. Might be scary at first since most bankruptcy is due to credit card misuse but I tell you, this is your way to recovery as well. Just remember what you learned from your mistake. This time, use the 35/40-day no-interest period on your card and zero out your debts. Another trick is to bill something on the card and pay it off shortly. This will do good on your payment history and the amounts owed.

Next, get other credit sources. This will be for the types of credits used, payment history and amounts owed. You may want to consider having a short-term loan like a student loan or a bad credit loan that has a negotiable interest rate. By paying these loans religiously, you would definitely get good points for the above mentioned factors.

Fourth, never close any zero-balance accounts. They do not pose any risk for you but instead they work wonders for your credit report. It would indicate you having a wide number of credit used, a good payment and credit history.

Having a good business relationship with your lenders would work to your advantage. This would allow you chances of renegotiating your terms at a time when you are in a tight situation. This would also work both ways as the lenders are guaranteed of continued payment and you reduce the risk of having a bad remark on your credit report.

Lastly, keeping an eye to the entries that get sent to the credit bureau is a good thing to do. It would be best you are subscribed monthly to one credit bureau report and get a copy of the other two credit reports annually.  Or better yet you can subscribe to TrueCredit for under $20/month and get real time monitoring from all three major credit bureaus.

Repossession is the seizure of property that you bought using credit for which you were not able to pay.  Car financing is a secured loan because your vehicle acts as collateral. Since your purchase contract or credit contract with your creditor gives him the right to take the property back the property is then sold to a financial institution or third party sellers such as debt collectors. In cases where the property to be repossess is your car, the vehicle can be confiscated even without your permission. A good delaying tactic is to verbally object when they try to repossess your car but this has its limits since if your creditors come with a court order you can do nothing about it.

You can prevent repossession by communicating with your finance company as soon as you cannot make the payment on time. The lender can agree to let you pay late for one month or change your due date so it coincides with your paychecks. Sometimes your delinquent payment can be added on top of your last loan payment. Keep all agreements in writing if it involves a contract and your signature.

Repossession takes about a month or two to appear in your credit history. This brings a drop of about 100 points on your credit history. This also has a very negative effect on your credit report even if you voluntarily give up your property this will still impact your score. Your credit score can erode further if your lender cannot sell the property at an auction equal to your balance (which is known as a deficiency). In addition to this if you cannot pay off your deficiency, the lender will get a court judgment which can slide down your credit score by another 100 points more.

Repossession has the notoriety of causing your credit score to drop from excellent to poor. This can be removed in your credit report after seven years. In cases where the repossession is not reported correctly, this gives you the chance to potentially remove it. Request for your credit reports from the major credit bureau and check everything up to the smallest detail. As a consumer you have the right to dispute any mistakes. If the lender cannot verify your reported mistake the repossession will be erased from your credit history within a month.

If you cannot find anything wrong with your credit report then the best thing that you can do is to try to find ways to repair your damage credit scores and credit history.  Two of these methods can be if you try to pay your huge debts and avoid paying this after the due date.

To have a line of credit you have to build one, the problem is you don’t have any credit. But if there’s a will, there’s a way.
It is all a matter of strategizing. To build and rebuild your credit file, you might want to consider the following:

• Applying for a secured credit card is perhaps one the most basic things you should do to build your own credit history. This is a type of credit card that also serves as your bank savings account. The money in your account will be used as a security fund in case you have payment defaults.
• You could also choose to apply for an unsecured credit card. Unlike the secured credit card, you can get a traditional credit card that does not have a savings account meaning you can apply for a ‘no credit history’ credit card.
• Another strategy is to ask a family member or a close relative to act as a cosigner for your unsecured credit card.

Since unsecured credit card will be the best option to do, here are some tips to help you secure one:

1. Apply for cards that fits to your financial status. You have to find card issuers that target demographics that includes you or those creditors that only want customers with perfect credit.
2. A checking account or savings account under your name will also contribute to your financial position.
3. Make sure that you don’t have bouncing checks and has not overdrawn in order to not to affect your credit building.
4. You may not know it but it do helps to have a phone number or utility in your name.

These basic steps, once followed, will most possibly give you a perfect credit history in as soonest possible.

Like most Americans who have a bad credit rating they are desperate for a credit repair in order to improved their credit score. But in the middle of your ardent desire for a credit repair they are left vulnerable to a quick fix through the “help” offered by these credit repair companies. Be aware and beware!
Credit repair organizations are governed by the Credit Repair Organizations Act.  Their prime role is to protect consumers from unscrupulous practices by organizations who claim that they can repair their credit. The Act seeks to ensure that consumers are aware of their rights so that they are these consumers can make an informed decision on which credit repair company to choose from.
A credit repair organization (CROA) is any person or business who takes money in exchange for improving your credit. But they are restricted to lie about your credit history to your current or future creditors. They cannot change your identity to try to get a new credit history. They also cannot ask you to pay for services if they had not provide it to you yet. Before they can perform any services for you they must let you sign a contract. You are allowed a 3-day business day cancellation period.  Some are actually longer like 10 days.

What does the contract contain?

The contract contains information on the payment that they will charge from you. A description of the services that they will offer you. The contract will also contain the estimated time to complete the services for you.And lastly, a statement stating that you can cancel your contract with them within 3 days. They cannot forced you to sign any form waiving your rights  since this is against the CROA policy. If in case this credit repair organization violates the law they can be sued for actual damages. You have five years from the date of when the date of the violation occurred to take action against the organization.

How to detect if your being scam?

• You are not given a copy of the Consumer Credit File rights under the Federal and State Law. You have the right to obtain a credit report and dispute it in case you find some discrepancies.
• You are not given a copy of the contract before you sign it.
• The contract does not contain all the information that is needed as previously explained above.
• The company promises to remove accurately reported information from your credit report.

Have you been  victimized by Credit Repair Organizations?

Do not be embarrass to admit that you have been a victim. Remember you have your rights. Report them with proper documentation. For all you know you might be helping other people who are in the same situation.

There are alternatives that you can take to attain credit repair:

• Order all the three credit reports from the three credit bureaus. It is possible that they each have different information. This can give you a complete view of your credit history.
• Examine your reports carefully. Sometimes credit bureaus generate information that they receive from your creditors without properly making a thorough verification.
• Dispute if you believe that there are discrepancies found. Like mistakes on what the report have. Make a copy and highlight these mistakes. Proper documentation is the key.The credit bureau will now start to investigate, after 30 days they will give you the reply to your dispute.
• Devised a spending plan that will enable you to dissolve your debt.
• Add stability to your credit file.  Some creditors may not report your credit history to these credit bureaus like local banks, credit unions etc. Pay on time to re-establish good credit so that you credit score will improve.

The Federal Trade Commission has enforced law to protect consumer rights in America. This law is called the Fair Credit Reporting Act (FCRA) which was made to ensure the privacy of the individual or consumer information that is used in credit reports. A latest revision was made with regards to rights and has placed additional requirements on credit reporting agencies (CRA).

Businesses are held responsible for supplying your information to CRAs. Those that use these consumer reports have responsibilities under the law. Your rights under the Fair Credit Reporting Act are as follows:

The consumer has the right to receive his copy of the credit report from the three major credit bureaus once a year for free. The copy of your credit report must have all the information in your file at the time of your request. You have the right to know the contents of your credit report including medical information and the sources of these information as well

You have the right to know which person has requested for a copy of your credit report in the last year for standard purpose and two years for employment purposes.

If your application in a company was denied because of information that the credit bureaus may have provided, the company must provide you with the name and address of the specific credit bureau that had provided the said report.

If you think that there is a discrepancy in your credit report then you can file a dispute with the credit bureau and with the company who has was the source of the information. Both of these companies must investigate your claims.

If you are not satisfied on how the dispute was resolved you have the right to question them.

In case you find inaccurate information in the said report you can write the credit reporting agencies about the details regarding what you find as false or has inaccurate information. CRAs must need to investigate your allegations for 30 days and after that submit the result of their findings. They need to furnish you with a copy of their findings.
If the information provider finds the disputed information to be inaccurate it must notify all nationwide CRAs so that they can correct their information in your file.

A prospective employer cannot get your report without your consent. Your medical records cannot be revealed too as long as you do not consent to this. Not everyone can get a copy of your credit report only those who have a legitimate reason for asking for it may avail of a copy of your credit report. If you don’t want to be a victim of unsolicited mails then you can place a request by calling a toll free number.  After completing a request form your name will be removed from the lists for unsolicited offers permanently.

Do you know if a credit score will be important once you apply for a job? Most employers are not concern about the FICO scores itself but rather more about the credit report as a whole.  If you are known for being late on your house payment, declared bankruptcy, house being foreclose because of late payment on your part then your employer might see these as a sign that you will not be a good employee so therefore he might disqualify you for the job that you are applying for.

Most IT and marketing professionals are mostly undergraduates so in this scenario the employer would not solely make their judgement based on the FICO score alone.  Having a low FICO score represents your character and the good or poor choices that you have made in the past. Employers will only pull credit reports and do background checks (criminal, driving history etc.)If they believe that such would affect the position that you are applying for. Based on the present global economic situation many job applicants FICO score are lower than they were so if given an opportunity just simply explain your circumstances during the interview process.

Some companies might take your poor credit rating seriously if you are applying for a position that may have to do with the company’s money if it will be at risk just in case you will be the person to be responsible in handling the company’s finances. It is a question of whether you will be trustworthy enough to be given such as task. It really depends on whether your job interviewer can understand how it feels when faced with a financial situation or set back.
Still other reasons why employers may check on your credit history may have to do with government security clearances that are required for the job.

Jewellery manufacturers do background checking since precious stones such as diamond can easily be stolen. Your employer might want to know if all the details in your resume are true. The Fair Credit Reporting Act (FCRA) has defined the standards for screening an employee. Through this law the employer must send you in writing and get your written authorization that they will do a background check on you. So in essence your prospective employer cannot get your credit report without your permission.

When hired for a new job as an employee you are required to prove that you are legally entitled to work in the United States. Employers are required to check your identity, your Social Security number and criminal history (if any). It pays to make sure that your credit report has no reported errors since if they do then find the time to rectify this so that it can be removed from your credit report.

Your credit score is affected by your credit card utilization. If your credit card has low limit and you use the complete limit this would definitely affect your credit score but on the other hand if you have a high limit credit card and you are using a relatively low amount then you will have a good and stable credit score. When applying for a higher credit line some things to consider besides your credit score is your income at the time of application and your credit card history.

Choose a credit card company where you can establish a good relationship with. They would be willing to offer assistance in the future in case you encounter a credit card problem. If you believe that your incomes is too low for such a high credit limit then better make several credit line increase request as little as possible since denials will not look good on your record. Make sure though that you have stated the correct information regarding your income.

Get quotes from different companies so that you can make comparison regarding their rates and limits. Choosing a credit card with high limit but average rate is a good decision. A good bonus of having a big credit limit is that if you have several debts then you can consolidate them on high limit credit card with low interest rates since it allows you to pay off your debts faster therefore you are saving money on interest. Having no debt can boost your credit score.

If you know and believe that you are a responsible credit card owner better apply for a pre-set credit limit card since they are not reported as such so you can charge high on the card since the company only needs to report the highest balance as the limit on this type of credit card.  Be sure to spend wisely though since if you have use 80% of your credit line then you are definitely in a whole lot of financial trouble.

Constantly remind yourself that having a high credit limit card does not entitle you to use all of your available credit since if you do this you will hurt your FICO score. Do not apply for too many credit cards since you will have a hard time keeping up with just paying the interest alone.

So how do you get a higher credit limit? Ask your credit card issuer for an increase and place it in writing.

• Abide by the terms and conditions set forth by your credit card issuer.
• Prove your credit worthiness. You can do this by not defaulting on your mortgages, personal loans and other loans since this information will not help you in requesting for a higher credit limit.
• Use your credit card on a regular basis and be consistent with your payments.
• Make more than your minimum repayments each month. A higher credit limit calls for higher repayments so if you are not capable to make higher payments then therefore they will think you cannot pay them if they decide to increase your credit limit.
• Late payments are points against you so do avoid doing this.

Credit history also goes by several names such as credit report and credit reputation. When you are trying to apply for a credit card or any type of loan most lenders will look for your credit history. Your credit history or credit record is maintained under the three major credit bureaus. They are Equifax, Experian and TransUnion. Credit history contains your Fair Isaac Corporation (FICO) score that can help lenders decide whether you are credit worthy or not.

Credit history is simply your financial past reflected on the records. Having a good credit history allows you to avail of a bank loan, get a job, have better insurance rates and reflects you as a good tenant if you are renting an apartment. Once your credit reputation is build up you should keep it in good shape. Having a bank account with a reliable bank reflects on your ability to make immediate payments on your bills in an attempt to establish a good credit history.

Credit history contains complete information on where you live, how you pay your bills and whether you have been sued, arrested or have filed for bankruptcy. Credit reporting companies sell your information to creditors, insurers, employers and other legitimate business that may need them. They used this information to evaluate your application for any loans and the like. Having a good credit history will make life easier for you since you will be able to get loans and lower interest rates. Lower interest rates helps you make smaller monthly payments.

Be careful of paying on time since this can damage your credit history. “Prevention is better than cure” when it comes to fixing your credit score. Once you have the credit report in your hands be sure to carefully inspect this. Keep in mind that these credit records are maintained by humans who can commit an error anytime. Filing for bankruptcy will also be reflected on your credit report and will stay there for 10 years. Increasing your credibility can mean an increase in your reliability as a potential borrower.

Some of the factors that will improve your credit score have to do with you holding a steady job for a long period of time and no frequent movements in your place of residence. Beware of scam artist who offer that they can erase your negative credit history since in truth they can never deliver since what can really help is being able to repay your bills on time will improve your credit report or credit history.

Under the Free File Disclosure Rule of the Fair and Accurate Credit Transactions Act (FACT Act), requires the three major credit bureaus to give you a yearly credit report for free.

Establishing a good credit history is one of the most significant things you can do for your own future. Credit history follows you the rest of your life, and affects future loans, insurance premiums, as well as job opportunities.

People with good credit ratings are given lower interest rates, easier repayment terms, and also more easily approved for loans. With poor credit history, however, it becomes much harder to find loans, you are subject to higher interest rates, and need to pay higher insurance premiums.

You can look at credit history as your track record in loaning. It tells the creditor whether you repaid your loans on time or not—and if you can now. As soon as you apply for a loan, the lender contacts one of three major credit reporting bureaus: Experian, Equifax, or TransUnion. Each agency has a record of your credit history, which your previous lenders have supplied them. A credit report shows how much you have borrowed, when, and how faithful you have been paying.

So begin by creating a good credit history. This is easily done whether you haven’t borrowed money before, or if you’re trying to fix a poor credit history. You need time, persistence, and intelligent decisions to establish credit rating again. The key is to begin with good credit. If you don’t do this, it takes a long time to re-establish your credit.

Open a Checking Account

A good banking history is the first step in learning how to manage your money. See, you’re building a relationship with a bank to help you secure credit in the future. Think about how you will manage your account prudently, staying away from overdrafts.

Take Out a Secured Credit Card

For new borrowers, secured credit cards are recommended. Here, you are given a credit card in return for a deposit amounting to the credit limit. Your deposit is your collateral for the credit. The bank uses your deposit to pay for your debt if you fail to pay according to the card repayment terms.

A secured card is used the same way as a regular card. Pay off the full balance monthly, or make minimum payments, but be sure to make payments on time. Delayed payments will raise your interest rate, and also cost you in late fees — damaging your credit history.

Use a Store or Gasoline Credit Card

Easier to acquire than regular credit cards, a lot of gasoline cards don’t allow you to have a balance from one month to the next. This makes them a good option for beginners. You can also take a store credit card to use at particular retail stores. Gas and store cards often have higher interest rates, but they are a good step in building a credit history.

Co-Sign on a Loan

You can establish credit by co-signing on a loan. If, for example, your parents need a car loan, they may allow you to co-sign with them. This gives you the opportunity to build a credit history, not being subject to high interest rates. But be very cautious when co-signing on any loan, because by doing so, you are just as responsible for the loan. Nonpayment by the lender will appear as late payment on your credit history.

Use Credit Wisely

Never haphazardly apply for credit cards and loans. Make decisions based on terms and interest rates. Every time you apply for a credit, an inquiry is noted in your credit history. If there are too many inquiries, creditors become suspicious.

The secret to establishing good credit history is to pay all bills and loans promptly. Every late payment counts against you. Bank account overdrafts, unpaid medical bills, and utilities can also harmfully impact your credit report.

Creditors and credit bureaus are greatly interested in your capability in repaying your loans. Take the effort to create a good credit history, which will help shape your financial future.

Credit Line or Credit Limit is the maximum amount of money that a financial institution such as a bank will lend an individual or business without asking for additional approval.  This enables you to write a check or make cash withdrawals up to your credit line or credit limit (please see increasing your credit limit). Just like credit card, you draw on the credit when you need to pay for something that is financially out of your reach. The amount of interest charged for each small loan using credit line varies.

Credit lines mature in one year and are renewed annually. To avail of the loan, promissory notes are signed by the individual. Banks do charge penalty for late payments on all outstanding loans so be sure to pay your loan entirely before taking out additional funds. Borrowers must keep track of their loan obligations in order to keep track of their payments.

Types of Credit Lines:

Personal Line of Credit
Home Equity Line of Credit (HELOC) is categorized as secured since you use your home as collateral. Your credit limit is based on the calculation of the market value of your house. The Federal Truth in Lending Act gives you three days to think things over before you decide whether to go ahead with your home equity line of credit.

Business Line of Credit is also a secured loan, the value of your business assets is use to secure your credit line. The financial institution evaluates the business profitability and risk. It may look at your business’ profit and loss record. They may also look for large investment that you may have since this will greatly impact your ability to pay back the loan. Examples of these are your office building and your other real estate business.

Secured lines of credit are those backed by collaterals such as a house or business while unsecured lines of credit are not backed by collateral and has higher interest rates to account for the greater risk it gives to the lender. Depending on the agreement with the financial institution, your line of credit may be classified as demand loan which means if they request you to pay immediately you need to comply.

Individuals do prefer line of credit over a traditional loan because in the former you make payments only on the credit that you use whereas on the latter you have to pay the loan back whether you use the money or not. When you apply for a line of credit, your lender looks at your ability to repay and your credit history. They also evaluate your present cash flow, job stability and lifestyle aside from your credit history especially with regards to how you pay your debts in the past.

If you just need a to purchase something of small value and you believe that you can pay this back quickly, a credit card might be your best option instead of using your line of credit.

Reasons Why You Must Open a Business Credit Line

If you are a business minded individual or a business owner who might be thinking of expanding your business, a business credit line can give your business the financial freedom which is essential to your success. A line of credit supplies you with constant cash flow so that you can update your equipment and have something financially during emergencies. You must be in business for at least two years to be able to apply for business line of credit. Before this you must first start building on smaller lines of credit or corporate accounts with your present suppliers since later on this will help boost your credit scores which will ultimately help you attain your goal of obtaining your own business line of credit.

Lenders reserve these business credit lines for businesses that have proven their reputation and worth.  A lot of business owners pick applying for business credit lines instead of typical loans for these reasons:

• They offer lower interest rates
• Helps you improved your cash flow management especially when market instability is predictable
• Making purchases that is too huge for a credit card loan to handle and too small for an ordinary loan although there are certain limitations to this such as not exceeding the maximum amount and paying your balances on time
• Acts as temporary financial insulation for tough times but keep in mind though that this cannot be use as a complete solution for all of your cash worries
• Allows you to pay the balance so that you can continue to borrow again

If you want to apply for business lines of credit you can start by collecting all of your business and personal financial documents. Brainstorm about how much business credit you need. Thoroughly check your credit reports for specific errors, if you found any of this the next step would be to resolve them with your creditors before applying for your business lines of credit. By doing this your credit score can increase that much to help you establish a better credit history therefore a better line of business credits. You can now start by writing a comprehensive business plan that contains all the minute details that you can give about your business. Take all of these documents to your local bank since you are now ready to apply for a business line of credit. It would be better to apply for unsecured line of credit since you do not need to put up any assets as collateral. If the bank will not approve an unsecured line of credit then your second option would be to lower the amount that you are requesting to borrow.