DIY Credit Repair
Posted on 04. Nov, 2009 by admin in General
If you’d rather repair your own credit than spend a pile of money for someone else to do it for you, here are some things you’ll need to keep in mind. There are five main areas that lenders look at when they are deciding whether or not you are a good risk. Here they are, and knowing them will allow you to get rid of credit card debt and rest easy.
-Character is a measure of your financial stability. It would be ideal if the lender knew you as a person, but since they probably don’t, they have to rely on your credit score. Making timely payments is one of the best ways to show good character. Your credit report typically shows delinquencies at 30, 60, and 90 day intervals, and credit card issuers are sticklers about reporting those late payments. When you are trying to salvage your credit, paying on time is a good way to start.
-Your cash flow has to be enough to pay the debt you have. Lenders and creditors will want to see how much income and expenses you have each month.
-Capital demonstrates that you can manage your money in the long term. It’s your net worth! Lenders don’t want to give money to those who have none, they want to give it to those who can pay it back.
-Collateral secures your debt. Loans like mortgages are secured with additional property, which reverts to the lender in the event of a default. The last thing the lender wants to deal with is a repossessed home or vehicle, but at least that way they aren’t losing as much money.
Other things, like economic conditions are beyond your control. Due to the recession, lenders have become much more selective in whom they lend money to. This applies to not only nationwide lenders but local ones as well. There are a multitude of reasons why your credit application can be denied, but there are just a few main ways to fix your credit- character, capital, collateral, capacity, and conditions.
If you’d like to figure out how to fix your own credit and read the latest news about credit card debt, click now.