As an individual who is focused on repairing his/her credit, you must ask yourself, "Am I "Credit Worthy?" Credit Worthiness is established when you are able to show that you can be an asset and not a liability to a lender. They have enough people who simply want to borrow money just to pay off more debt; thus digging them further into debt.
What is your reason for wanting to repair your credit and how did you get into this fix in the first place? Whatever the reason, just know that you can get it right, but it will take some leg work.
If at all possible:
>Try to avoid Bankruptcy (Debt Consolidation falls under this category)
>If you are able to settle for less than the full amount, do so.
>Take advantage of any extra funds you can utilize towards lowering your balances. Tax time would be great!
Getting Started
There are so many people who will tell you that you have to spend hundreds of dollars on credit repair, but the truth is, all you have to do is 1. STOP IGNORING YOUR CREDITORS". You will be surprised how easily you can make arrangements with many lenders. Just because you took the initiative to open your mouth and speak to them, even if you are unable to pay, they may be willing to work with you.
Think about it. How would you feel if you were calling someone or even a business, but you could never get an answer? You actually had some okay news or maybe you just wanted to say you were sorry for the last bad conversation you shared. In any case, you would not want them to ignore you, however, by the time you did get in touch with them, you really didn't feel like talking anymore. The good feeling you felt has now passed and you could care less how they felt about anything.
Well that's how some lenders feel. They didn't ask you to come and borrow the money and they feel they don't have to ask you to repay it so, conversation is a must.
2. Get a copy of your credit report. You can obtain a free copy of your credit report once annually or after you have applied and been denied for credit.
3. Contact your creditors and let them know you are considering making payment arrangements to settle the debts. As I said before, Conversation is key. When you call them and reassure them you are doing your best to lower the amount you owe, they will figure out ways to work with you.
4. Set up payment arrangements. Now, I know you're probably thinking,"I don't have enough money to pay them right now, but I implore you to just BE HONEST. If you don't have it, fine, tell them, but at least give an amount, no matter how small, that you can pay to show that you are TRYING. That is really all that counts, believe it or not and it will eventually show on your credit report.
5. Establish a good rapport with the lender or credit collection agency by being sure you do not miss payments and if you think you may miss any, contact them ahead of time. No call screening. Answer that phone or call them yourself.
6. After the payment has been paid in full, ask the lender or credit agency to report the payment on your credit as being "Paid in full". If at all possible, ask them not to mention that it was a previous collection or settlement. If not, it's okay, this just means it will take longer for the delinquency to be removed from your credit and other creditors will be able to see the status. Nevertheless, "Paid in full" is the most important thing.
In the next session we can talk about credit scores and how to re-establish and maintain your credit.
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