Credit repair techniques - Start with your unused credit accounts

What you should do with unused revolving charge accounts and extra credit cards?

To make your credit more attractive to a potential lender, you should consider reducing the number of revolving charge accounts that are listed as active on your credit report. Lenders will sometimes view too much revolving debt as a negative when considering a loan application.

In situations where you have stopped using a credit account, it is often a good idea to close the account if you don’t plan to use it anymore. Make sure your creditor notates the account “closed at consumer’s request”, otherwise, a prospective lender might assume the creditor closed the account for other reasons.

Two well managed credit cards can improve your credit and your chances for a loan, particularly a mortgage loan, where lenders use stricter qualifying guidelines.

If you don't have a credit card because of poor credit there is one that can actually help you rebuild your credit. You can read our review and apply for the imagine credit card here.

Another rule of thumb is to keep balances on credit cards around 75% of the available credit limit. Ironically, credit cards that have lots of room on them may be viewed as potential debt, while maxed-out cards make you a less desirable credit risk, both of these situations could compromise your ability to obtain a loan.

If you are trying to improve your credit one of the most useful tools or techniques it to apply for a credit card for bad credit that reports to the three major credit bureaus. You may have a lower line of credit and it may take you anywhere from 3 to 9 months to get your credit score back up to where it should be.

Credit repair is the long term solution

Knowing how and who can repair your credit score effectively is the single most important piece of information you can have to increase your financial knowledge. It is also the only way you can get out of the financial doghouse and back on track to financial security.

There is only one company that we recommend and that is the Lexington law firm a credit repair agency. They have helped over 300,000 Americans repair their credit reports by removing inaccurate, misleading, or unverifiable negative credit. From bankruptcies to charge-offs to tax liens, they have and will challenge, virtually every credit problem there is.  

Talk to a credit counseling agency and get help preparing your personal budget plan. This is going to include getting a copy of your credit report and possibly using a credit repair service.

You can read more about what type of information contained in your credit report here.

If your credit is going down the drain because you can't make your payments at the end of the month

This also happens to be the first steps in creating your own personal budget plan.

1. Find all your bills, add all these up to figure out how much you actually owe.
2. Write down how much each monthly minimum payment is and total up.
3. Prepare your list of how much money you spend each month and on what.
4. Total how much money you have each month after deductions. Deduct this from the money you need to put out each month, so you can see if there is anything left to pay outstanding bills.
5. Phone your bank immediately before your creditors start calling you and make an appointment with their finance councilor.

If you have nothing, take the steps to ease your situation

Do not try to solve this problem on your own. It can be done much easier and faster if you have someone that has dealt with this problem before.

Banks deal with this situation every day and they know how to deal with it to your benefit.

The bank is going to ask you to by provide a copy of your statements and income. This is a normal procedure and something you will have to do.

This is going to take more than one visit to your bank, but it is guaranteed that you will feel better about your situation by the second visit.

The bank may ask you to explain to them, of your short term problem, be very honest.

They then may give you a solution or arrange some type of payment schedule based on this information.

If things have gotten really out of control and bankruptcy may be your only answer. Never do anything unless you have had legal council to do so. Bankruptcy must only be used if you have no other course of action, it is a very serious financial situation to put yourself in.

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