Once you have accepted credit, you are, in effect, using someone else’s money to pay for what you want. Furthermore, it also indicates that you guarantee to repay the money to the agency or person that loaned you the cash within an agreed time frame.
If you are applying for a loan, credit card or mortgage, it is normal for the agency or bank to check up on your credit status. This is essentially based on an assessment of your credit history, thus helping them determine the possible risks of the deal and set the terms of the loan. A positive assessment means that you have a good financial history, which increases your chance of being given credit.
Credit Repair: This is the process whereby consumers with a poor credit history try to re-establish their credit worthiness. It involves obtaining a copy of your credit report from the agencies and taking careful and appropriate steps to address apparent issues, including omissions, misreporting, misinterpretation or other inaccuracies.
If there are any discrepancies found in the credit report, you are entitled to investigate the errors that have unjustly damaged their credit worthiness. There are several laws and regulations that are designed to guarantee the fair and legal reporting of someone’s credit status. You can make use of these laws to legally and formally commence the process of repairing your credit.
Every consumer may ask for one copy of his/her credit report each year from each credit reporting agency. You will have to investigate the true cause of the inaccuracies and errors for successful credit repair.
Your credit record affects your purchasing power and eligibility for getting credit lines in the future. You should bear in mind that a good credit score can help in several areas such as: mortgaging a home, buying a car or even applying for a job. On the other hand, a bad credit rating can make you susceptible to exorbitant interest rates and unnecessary loan conditions from the loan agencies. These two facts are important to help you realize why maintaining a good credit rating is absolutely vital.
How Do You Repair Your Credit?: The process of credit repair can be achieved through conscientious work and discipline on your own. However, some companies will offer you ‘quick and easy’ methods to repair your poor credit history and they really can be quite tempting. However, these easy methods can also lead to further difficulties in the future, especially if they are not legal.
If your bad credit history was caused by issues beyond your control, you could ask for an upgrade of your credit rating from your creditor. However, this can only be done, if you have been able to make amends to your credit records afterwards.
Creditors do not normally trust consumers who have defaulted on their payments. This can create difficulties for you obtaining any credit. However, once you are able to show a stable income and patterns of regular repayments, the situation can improve over two to three years. In this way, even if you are a bankrupt, you will probably be considered eligible for credit cards within about two years, if you maintain a steady income.
Keep in mind that there are no fast fixes when repairing your credit. However, by contacting the credit bureaus, correcting any errors, budgeting and consolidating your debts, you can improve your own credit rating very quickly.