ClearUpMyDebtNow
Should You Pay Somebody to Repair Your Credit?
If you (or someone you know)is thinking about paying someone who says they can repair your poor credit rating, be careful! It might seem like you could pay someone to erase your mistakes. This isn’t really true.
Credit reporting agencies report your credit respect to paying your bills and can only report what’s sent to them from your creditors. They can’t simply ‘erase’ your mistakes. In truth, only you can repair your credit.
How can you repair your credit report?
First, you need to look at your credit report to see what is on there. You should be able to obtain a free copy from your credit bureau. If you want an instant copy you can pay for that online. If you spot any errors, you can have them removed by contacting the credit bureau. Also, if you have any unpaid or bad debts you can talk to the companies individually to make payment arranges and in some cases they will negotiate and change your report on their next report to the credit reporting company. If you work with your creditors, you can often come to an agreement that results in the negative report being removed. If you want someone to do this negotiating for you, this is an option but may or may not result in a favorable credit report. You can get help from companies willing to negotiate on your behalf through debt settlement as well.
Time can be a healer of credit ratings as well because previous slow payments or missed payments will eventually disappear from your report due to time limitations set forth based on wherever it is that you live.
Other options for helping your credit score can include getting a loan with a company that will charge a high interest rate to those who haven’t got perfect credit in exchange for regular and good reports (so long as you make on time payments ) Getting a secured loan or signing up for a credit card that’s pre-paid could also improve your credit. You need to be diligent in changing your financial habits in order to show to future creditors that you now take your finances very seriously.
Be careful:
Going into debt to improve your credit doesn’t always work. Be sure you’ve cleared up old debts before starting new ones! The best way to repair your credit report is to act responsibly going forward. Pay cash for goods now and if necessary, seek credit counseling or a debt settlement to help you start fresh.
Good Debts vs Bad Debts
Is there such a thing as a good debt? Actually there is. Of course it’s a good idea to be debt free wherever possible but there are times when a loan can help you improve your life. Credit can be a positive thing for you if you’re careful about it.
There are good debts and there are bad debts and there are a few gray areas as well. All debts can cause you financial problems if you run into trouble or don’t manage money properly but when you take on a new debt, careful consideration about whether it’s a good debt or bad debt can help you manage your money effectively:
Credit Cards
Credit cards are typically a bad debt because they cost you more than you gain. If you use a credit card to buy groceries, gas and for spending money, you’re definitely creating bad debts because it costs more money for absolutely everything you buy due to the interest and cardholder fees.
Mortgages
Because the home will probably go up in value, a mortgage is a good debt.
Auto Loans
Bad debt due to depreciation in monetary value. A new car depreciates the minute you drive off the lot but this may be a necessary type of debt because having a car to go to work brings you financial gain. Minimize the damage by getting a good deal on a car you can afford.
Student Loans
A student loan is buying you the education to improve yourself and your future finances so a student debt is a good loan as it’s an investment in your future.
Line of Credit
Credit lines can be good and bad depending on how you use them. Use it to renovate and increase the value in your house and that’s a good thing but use it to book a Caribbean cruise that you really can’t afford and it’s not such a great thing. Be careful not to pull too much equity out of your house with a line of credit otherwise your mortgage will become a bad debt!
What About Loan Consolidations?
Is a consolidation a good or bad debt? It can get you debt-free if you go about it the right way so be sure you research the ‘right’ loan and don’t let yourself fall into old habits with spending.
5 Tips for Dealing Effectively With Your Creditors
Believe it or not, your creditors are not the enemy… they want you to pay your bills on time. It costs them money and resources if you don’t. Follow the below tips to help you if you’re in financial trouble. Ignoring creditor phone calls won’t solve your financial problems and the sooner you deal with your money problems the more negotiation power you’ll have:
Call Now
Don’t put off making the call to negotiate with your creditors. Don’t hide from them. IF you can call before you’re going to be late with a payment, they might give you more leeway than you’d expect.
Be Honest
Don’t just tell them what you think they want to hear. Be sure you’re making payment arrangements you can actually keep. You’ll lose credibility otherwise!
Don’t Be Bullied
Familiarize yourself with consumer rights with creditors for your area so that you aren’t bullied into something that’s probably not even legal. Certain laws exist about how often they can call, whether they can call you at work, what types of threats they can make, etc. Place nice but let a bullying creditor know that you’re aware of your consumer rights.
Negotiate
It doesn’t hurt to try to get your payment lowered or your interest rate reduced. Very often a credit card company, for instance, has the power to make changes to your account that work in your favor.
If It Gets Too Stressful…Ask For Help
Know when to call it quits! If dealing with your financial problems is overwhelming and you’re not getting the results you hope for, consider seeking advice from credit counseling or debt settlement agencies that can manage this process for you.