Ashley M asked:


I ruined my credit in college and as a result I have about $10,000 in debt. Most of the accounts are in collections, charge offs, or past due. The only thing positive on the report are my student loans and my car loan. I have heard of disputing the reports, but I also want to find a credit repair firm that will allow me to make payment arrangements. I want to improve my credit rating so that I can purchase a home in a few years, get approved for more credit cards and also get a new car.

Michael Redbourn asked:


perly repair your credit, and to get the very best possible results, you’ll first need to carefully learn the steps and then apply what you’ve learned in a methodical and systematic way.

Obviously it will be easier to repair a credit score that’s just a little dented, rather than one that’s in terrible shape, but the same methods have to be used in both cases.

Since credit cards are without doubt the most important things to get sorted out, you might think that it would be best to wait until your credit’s well on the way to being fixed before applying for them, but you’d be wrong. The reason that you’d be wrong to wait is that it takes around six months before you’ll see any benefits from any form of revolving credit.

If your present situation suggests that you’re unlikely to get approved for any new credit cards, then take out two secured ones, and since almost anyone can get secured credit cards, I’ll assume from this point on that you now have two of them. It’s the best number to work with and I’ll now explain how to use them to best advantage.

Start using them as soon as you get them, but never let the balance, which is the amount that you owe, go down to zero, and always keep it to less than 20% of the available amount. The difference between a maxed out credit card and one that is within the above ranges will make a difference of around 150 points to your credit rating, and that’s a huge number of points!

I should perhaps add here, that it doesn’t really matter how you use your cards if nobody is going to be checking their usage, but make sure that you follow the above advice for at least sixty days before you apply for some new form of credit.

The FICO (Fair Isaac Corporation) scoring system has a built in bias against all consumer credit that’s used for the purchase of furniture, appliances, electronics and any kind of store loan in fact. So if you have these kind of debts them then try to get rid of them, or at least cut down on their number, at least sixty days before someone is likely to run a credit-check.

You’ve most likely heard or read, that creditors will make deals and accept settlements for much less than the amount that owing to them, and you probably wonder why they’d be willing to do it. It’s because of what is known as the ‘statute of limitations’, and learning about them will enable you to get a great deal of debt removed from your credit report for next to no money, and with very little effort on your part. The ‘statutes of limitations’ vary from State to State and are different for different types of debt, so the details are beyond the scope of this article, but they can easily be found on the web with just a minimum of effort.

A ‘statute of limitation’ is the period of time that is allowed for a debt to be collected through the courts, and it’s generally much shorter than the reporting period limit for either credit or debt, and if a creditor knows that you are aware that your debt is outside of the statute of limitations then he’ll basically be willing to take what he can get, in order to remove the debt from his balance sheet, and after he removes it, it should no longer show on your credit report.

Finally, if you’re being harassed by debt collectors then it’s possible to put a stop to them almost at once by simply sending the company a ‘cease communication letter’, and there are no negative legal ramifications to firing off this kind of letter either.

So you now have some first-rate tips as to how to improve your credit score, and you also know how to stop debt collectors from knocking at your door, so if you start acting today then you’ll start seeing the results tomorrow.

Liam G asked:


With the current flood of adverts claiming how simple it is to get secured loans or any other line of credit, it’s easy to believe that anyone can be approved, regardless of their circumstances.

However, this is not the case, more often than not.

Even if applicants are approved for a certain line of credit – such as a credit card, secured loans or personal loans – the advertised rate of interest may not be the one that they are offered.

Why your credit rating is so important

As you may already be aware, all adults in the UK have their own unique credit rating. This is what lenders use to determine whether or not they will approve applications for credit and if so, at what rate.

Therefore, if your credit rating is less than perfect, you may find yourself being denied that new “super loan rate loan”. Even if you are approved, you probably wont get the “low rate” you were expecting.

So what should you do?

As it happens, there are quite a few steps that can be taken to improve your credit rating, ensuring you get the loan you want – and at the low rate advertised.

There is no such thing as a “quick fix”. However, a mix of the following methods will certainly help.

The electoral roll

If you are not on it already, make sure you are on the electoral register. If you’re not “on the roll”, your chances of getting credit are much more limited, as lenders want to know exactly where you live. Giving your local council a call should clear any electoral issues up.

If you are not eligible to vote, sometimes the case if you are a foreign national, you will need to send each of the credit agencies proof of your residence.

Timely applications

Multiple applications over a short period of time will have a negative affect on your credit rating.

Yet after being rejected by one lender, many would-be borrowers immediately make applications to another, and another and so on. This is know as the “rejection spiral” and can be avoided in two ways.

First, space out any applications over a period of a few weeks or months. Second, remember that credit applications aren’t just limited to loans or credit cards: they can be linked to mobile phone contracts, even car insurance, where you ask to pay for your cover by instalments.

Watch your footprints

Every time you make an application for credit, lenders make a note of this on your report. This is known as a “footprint”, and remains on your report for a year. There can either be “hard footprints” or “soft footprints”.

A “hard footprint” is a “credit application search”, and these are the ones to watch out for. If you are simply shopping around for the best deal, then you want to make sure that lenders are only making a “quotation search”, which will leave a “soft footprint”.

Nick Cox asked:


Credit rating systems are used by lenders to help predict the likelihood of a customer repaying a debt. They exist solely to maximise company profits, by helping to eliminate customers deemed as a poor investment.

Being classified as a ‘poor investment’ doesn’t necessarily mean that you are viewed as unreliable. For example, credit card companies may reject your application if you have a habit of repaying cards in full every month. Credit card companies don’t profit from a financially organised lender. A customer who is perpetually in debt, who only repays the minimum each month, is financially far more valuable than a customer who clears there balance at the end of each month.

Your credit rating will be checked whenever you apply for any form of credit, whether it’s personal loans, secured loans, mortgages, credit cards or even monthly car insurance. There is no escaping a credit rating check.

But what can you do to improve you credit rating if you’ve been refused credit?

The first thing to do is to obtain a copy of your credit rating. This can be done online by using any of the three credit reference agencies (Experian, Equifax and Callcredit plc). Once you have verified that the information held about you is correct then you have a number of choices to help increase your chances of being accepted for future credit agreements.

The electoral role – ensure that you are included on the electoral register. If you’re not on the roll, then you have little chance of getting credit from any lender.

Timing – avoid making multiple credit attempts within a short time period as this could have a negative affect on you credit score. Credit searches will leave notes on your file, so leave a reasonable amount of time between multiple applications, including applications for car insurance, mobile phones secured loans etc. This will minimize the impact to your credit score.

Deal with rejection – If you encounter a credit refusal that is due to an error on your credit rating but you continue to apply for credit without realizing, then this could cause you to become trapped within a rejection spiral. Even once the error is corrected you could find that you continue to be refused credit because of all the recent searches on your account.

By fighting your corner with the agency and the lender, it may be possible to rectify this problem, but this is often no easy task.

Mark Z asked:


Your credit rating is quite an important piece of recorded history. It tells something of your ability to manage financial debt to a possible lender who may have no other way of knowing.

You may feel that it is pointless to think about buying your own home if you have a less-than-perfect credit rating. However, in-roads can be made into this problem, and with patience you could be house-hunting this time next year!

Let us suppose you feel that your credit rating has been a little ‘off-color’ and that your record is not looking the way you would like it to. Some of us experience bad times, divorces, patches of unemployment, illness – there are many good reasons why a person can have a bad credit history.

Unfortunately these bad times can be mirrored in our credit rating. Failure to pay bills on time, or pay them at all, will be listed in the history.

But now life has been good to you, and things are under control, so how to get rid of all the black marks from previous years? Well, in effect, you can’t! Sorry, that is the bad news – but there is good news too! There are two ways around this problem that are fairly easy.

Some banks will set you up with a way to give you another chance! Many won’t, but there is at least one national bank that will consider helping you.

They will issue you with a credit card that carries a low credit limit of say $200.00 to $500.00 and you will deposit the equivalent sum of money in a new bank account at their bank.

Your money will not be used by you, it will sit there. It is like insurance for the bank. Every month you will use your credit card (make sure you keep a running debt on it), and every month you will pay the card off, or pay the minimum payment or a larger amount. This must be paid on time each month, as you are attempting to prove that you have control over your finances now.

The second way is this: there is a credit card company that is always sending out application forms nationwide; they actually advertise that you don’t need to have a good credit rating to get a credit card with them

If you get one of their cards, and pay off at least your minimum payment every month, you will be building credit. Now that you are trying to re-establish good credit, there are three golden rules.

Pay all your bills. Pay minimum balance when you can’t afford more. If you miss payments, get them up to date and do not let it happen again. i.e. request direct debit payments.

Even the most lenient mortgage lenders require a good credit history for at least a year, so if you follow these tips, you could be on your way to buying a home next year!

Abhishek Agarwal asked:


Having negative credit ratings in your credit history is a strict no-no. It is something that will hinder your loan applications and get you a bad reputation when it comes to your credibility. Most financial companies will look upon you as a risky credit customer. You must be very cautious as it takes just one mistake to make all the difference between a good credit history and a bad one. So, when you have managed to somehow get a bad entry into your credit report, you should spend some time getting rid of it and setting the record straight once more.

In order to set the record right you need to first get a copy of your credit report from one of the credit rating bureaus. There are three bureaus and it is advisable to get a copy from all three of them and consolidate your own report. This is necessary because your creditors need to send in a report of you paying or not paying a bill and they are more than likely to send it to one bureau and not to the other two. If you have paid your mortgage bills and one of the three credit bureaus have not entered it into their records it is going to reflect badly in your rating. So, you need to inform them of any mistakes, with proof of your payments.

You can get a copy of your credit report online. All three credit rating bureaus have portals that facilitate you getting a report within minutes of logging in. When you see that there is a mistake in your credit report you should immediately gather all the evidence you can, such as bills, receipts and any other correspondence you may have with the creditors and send it to the credit rating bureaus and have them rectify their records.

Remember to send your letter and documents via certified mail because the credit rating companies have a mean streak and sit on the case while your ratings get distributed among any financial agency that you may have applied to for a loan. You should understand that the credit rating companies are permitted to make your report available to any financial company, but not to the general public. If they can do this they are obliged to keep their records up to date and reprimand the company that has not reported your correct financial report to them.

Erasing a negative credit rating is not an easy job. It cannot be erased, so to speak, however, it can be raised but this does take some time such as 6 months to a year. You should try to keep your rating at about 750, like most Americans. If your rating falls below 650 you are likely to be refused any financial aid you may require from any institution or company.

Javaid Kiyani asked:


Managing your credit standing can be a difficult and challenging task. However, a good credit rating is essential if you want to succeed as a property investor. A bed credit rating will often mean that you are unable to fund property purchases and your business will suffer greatly.

The best way to maintain a good credit standing is to live within ones means. In fact, ones lifestyle spending must not exceed income. This is the greatest and simplest advice that one can give. The easiest way to live within ones means is to maintain a budget. This way, there will be proper supervision of finances. In this article we discuss some useful strategies that anyone can adopt to maintain a good credit standing.

First, always take precautions when shopping. Keep all receipts or bills evidencing credits as well as debts. This way, you will be able to track your cash flow. Your cash flow statement must be consistent and reflective of your expenses. You should check your cash flow situation monthly so that you know exactly where you stand.

You should always pay any contractual obligations, i.e. debts on time. Timely payment of the due amount is reflective of the honesty of the person in debt. This is a very important measure of trustworthiness, liked by creditors. Always make sure that all obligations are fulfilled on or before the debt matures. For instance, if the debt must be paid in an installment basis; it is advisable that the scheduled payments be paid on time and without failure.

Never exceed any credit limits that have been set for you. The total balance of any debt must always be below your credit limit. Should you go beyond your credit limit, it is wise to make an immediate payment to bring you back in again. Creditors like charging people extortionate amounts for exceeding their limits, and it wont help your credit rating if you continually exceed any limits.

You should also at all times live within your set budget. Indeed, if the payment allocated for debt servicing is higher than 10 % every month, then you must reconsider your spending habits. Debt servicing should always be below 10 % of your generated income. This acts as an automatic safety barrier which protects you from being in a situation where you are unable to meet your financial obligations.

By following the simple rules highlighted in this article, you should be able to maintain a clean credit rating and hence be able to grow your property business quickly with the necessary support of financial institutions.