THE CREDIT GAME: PART 3

Posted By Shafiq Jasar on Apr 10, 2012 | 0 comments


HOW TO REPAIR YOUR BAD CREDIT

By Shafiq Jasar

In real life, many things happen that are either of our own making or happening due to events beyond our control. People lose their jobs, make the wrong financial decisions and as a result, the financial burden is so heavy that it breaks their back.

An individual may have ruined his or her credit due to various unfulfilled obligations: not paying the bills or loans on time.

In general people fall into 3 categories:

  1. Good credit: In this category, we can use our good standing with the credit bureaus to our advantages for advancing our financial goals.
  2. Bad credit: When we have bad credit, it is very hard to get mortgage or a bank loan with favorable rates (if we get them it at all). Often banks and other financial institutions refuse to deal with us unless we provide extra assurances and satisfy them that they are at minimum risk.
  3. Bankruptcy: Once an individual is in this state he or she is almost guaranteed not to have a positive response from a bank regarding request for a loan or mortgage. In fact, in most circumstances, they are not allowed by law to accumulate more debt.

Once you are discharged from bankruptcy you may start rebuilding your ruined credit.  At this stage your credit rating may be 9, the worst it can get.

Here is how to repair a really bad credit:

  1. Apply for a secured credit card, since most banks may not give you a regular credit card. Talk to your bank in person. Explain your situation and show that you are serious to repair your credit. Then offer a few hundred dollars as security against the credit they give you.
  2. Use your credit card each month but with extra caution. Only purchase things that are essential.
  3. Never maximize your credit card. Stay below the 40% range.
  4. Pay your credit loan immediately upon arrival. Don’t wait until the due date.
  5. Arrange with your credit card company to take the minimum required amount from your bank account through a preauthorized arrangement. This will ensure that you never miss a payment.
  6. Pay all your bills on time and follow the above advice: don’t wait for the due dates. Pay bills as they arrive.
  7. After a few months, go back to your bank and ask for a small line of credit. Again, if it necessary, ask for a secured line of credit. Use this credit for your essential purchases. Pay the used portion of the credit at the end of the month. Once again, don’t maximize your purchases. Always leave plenty of room in your line of credit. Remember; never let yourself look desperate for money.

It always takes time to repair a bad credit. Credit repair is a slow process but you have no choice but to do it.

Credit and Your Integrity:

In modern societies a good credit is equated with integrity. People are more than often judged by their credit rates. This judgment is not only passed by the banks but also by insurance companies and other places.

Even in the general society, if people know of someone with a bad credit, he or she is treated as if they were afflicted by a medieval disease. A bad credit is considered a sign of weakness and misbehavior. Very few people are interested in or have the desire to find out why our credit rate is less than perfect.

So, you are on your own to repair your damaged roof. Start now and improve your credit and never again allow losing your good standing with the mighty credit bureaus.

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