Easy ways to repair credit in bad economy

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Easy ways to repair credit in bad economy
2 years ago
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No matter what the credit repair companies tell you, it really is possible to repair your own credit relatively quickly and easily. The great news is that the simplest steps you can take will often be the most effective in raising your score without resorting to drastic measures.

This particular credit repair plan has several positive side-effects. Instead of simply telling you what to do in each step, it's important you also understand how it will help you to fix credit. If you implement the plan correctly, you'll find that your monthly cash-flow has increased and your balances are being paid down quicker than they were before all at the same time as fixing your credit.

You should have a relatively clear idea of what your credit score is before you start. Knowing your score lets you know how much work you'll need to do in order to increase it. This isn't one of the necessary credit repair steps you need to take ??it's just simple common sense to begin at the beginning.

Step One: Accurate Picture
On a piece of paper, write down all your outstanding balances on any credit cards, personal loans or mortgages. Alongside each balance write down the minimum monthly payment the bank expects you to pay.

The majority of banks, lenders and credit card companies calculate your repayments based on a monthly figure. Budgeting monthly can often mean finding a larger sum of money than you're expecting so of course it becomes easy to fall behind.

Step Two: Re-Calculate
Grab a regular calculator and divide each of your monthly payments by 4. Write this new amount beside where you've written your minimum monthly repayment.

Keep in mind that banks make their profits from charging you interest on money you've borrowed. By charging you interest daily on any outstanding balances you have and then charging you the total amount of interest at the end of each month.

Step Three: Negotiate
Call your creditors and ask them if you can amend your payments to apply directly to your principal once the interest charges have been applied. While you're on the phone to your creditors, always ask if they are willing to negotiate on your current interest rate or whether they have a more competitive credit product available that you would be eligible to apply for.

This step is important, so don't be tempted to skip it. Your creditors need to know about any changes to your payments so that it has the highest possible effect ??and you might just get a reduction in your interest rates at the same time.

Step Four: Payment Alterations
Back in step two you worked out a new figure based on your monthly repayment divided by 4. This will form your new weekly repayment on all your outstanding balances.

All of your bills should have a payment barcode or online payment code. Keep this and choose one day to be bill-paying day. Friday after work is an ideal way to finish the work week and then you have a reason to celebrate.

All of your creditors report your repayment activity at the end of each month. Instead of reporting your one, normal monthly payment, changing your payment frequency means they're forced to report that you made 4 payments instead of just one.

This simple act will reflect on your credit score positively as you're actually making more payments than you needed ??even though you're paying no extra money.

Step Five: Round It Up
You should have noticed that your monthly repayments are not usually a nice round number. Once you divide this figure by 4 to get your weekly payment amount you'll notice that this figure isn't usually a nice round number either.

A good example of this is if your monthly repayment is $97.50 per month, then divide this number by 4 and you'll get $24.38. Simply round this number up a few cents and pay $25 per week.

It should only cost you a few cents to round up your weekly payment to the nearest dollar. Those few cents won't break your budget, but they will be reported to the credit reporting agencies as being extra voluntary payments, which once again increases your credit score.

Step Six: Be Patient
There are plenty of tips and advice sites on the internet all offering ways to fix your credit quickly. Some come with huge fees that you really can't afford if you're already in this situation. Other credit repair suggestions are extreme and could end up doing your score more harm than good.

You didn't ruin your credit score overnight, so don't expect to be able to fix it overnight either. This plan will take a little time, but the results are well worth the effort.

by Writing Ghost
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