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Tips on how to repair bad credit

nto bad credit is something many people undergo nowadays. So you need not worry if you are one of those who are in bad credit. Instead, you have to work at repairing this bad credit. Here are some tips on how to repair bad credit.

The first thing you have to do is to check to see if there is any incorrect information in your credit report. It is very possible for you to have some clerical errors on your credit report; which leads to your bad credit.

So you have to ask for a credit report, which is available for free. If you find anything wrong in the report, don’t hesitate to send submit a credit report dispute. The changes made to the credit report will help in repairing your bad credit status.

Negotiate with creditors

As late payments can deter your credit score, your next tip on how to repair bad credit is to make sure that you make all your payments on time. It would be better for you to negotiate with your creditors to have your charge-offs and collections accounts removed from your credit report. This way, you not only end up with lower monthly installments to be made, but you also improve your credit score.

Another tip on how to repair bad credit is to consider bad credit debt consolidation. This means that you are to get a bad credit loan to pay off all your old, existing credit card balances and loans.

Lower rates in bad credit debt consolidation loans

You will have to choose a bad credit debt consolidation loan that works out to have a lower interest rate than the average of all your existing loan and credit card amounts. The benefit of this is that you not only have a single payment to be made every month, instead of multiple payments to credit card and loan accounts, you also have a lower monthly installment to be made.

The reduced interest rate of the bad credit debt consolidation loan is the reason for this reduced monthly installment amount. The money you thus save in terms of monthly installments can be used to make surplus payments to your existing loans, so that you clear your loan and credit card balances as soon as possible. This will in turn lead to an improvement in your credit score rating.

Maintain prompt monthly payments

You could also consider getting a secured credit card to repair bad credit. You can use these cards to make small purchases, which you can afford. It is then up to you to ensure that you make your monthly payments towards this credit card balance. The faster and prompter you are in making your payments, the faster and easier you find it to repair your bad credit.

The prompt payments you make toward your bad credit consolidation loan and the secured credit card help in improving your credit score, and thus, your credit rating. Soon the word ‘bad’ will disappear from your credit score.

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August 1, 2010 - Posted by | Finance, Uncategorized | , , , ,

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