Resurrect Your Credit Rating

Let me say first of all that:

There is no such thing as a credit rating!

It depends on the individual lending criteria of the bank in question- look at the six ‘Cs’ and see how far down credit is on the list of priorities! Bankers know that many people have had some sort of credit problem in the past. Commercial banking is different- they can overlook things like this if you give an explanation before they discover it for themselves.

Anyway, before we look at the past, let’s concentrate on the present. If you are currently having trouble paying any debts do not bury your head in the sand! Phone them up and tell them so and that the monthly repayments must be reduced- either that or consolidate your debts into one low cost loan and don’t get into anymore consumer debt ever again.

You want as many credit lines as possible open to so that when bargains float to the surface you can pounce without delay. You do this by applying for loans and then paying them off early.

Apply for a credit card and then spend up to the limit (only for things you would have bought anyway!) and then pay off the whole amount at the end of the month. I bet they write to you soon after and up your limit! Build relationships with bankers- go to see as many as possible and tell them you look forward to doing business with them. You are the customer and they are in business to make loans.

Get a secured loan. You give the bank $1,000 as security for a loan for the same amount.

This is an excellent way to rebuild your credit!

Okay, now it’s time to drag out all those skeletons from your closet of the past- we’re going to dress up your credit rating!

Your credit file is there for all to see; you can’t just wave a magic wand and change it, but you can make it look more favorable.

First you need to know what you’re dealing with and bad news looks far more honest and professional coming from you than the banker finding out for himself. Log on to freecreditreport.com for a (yep, you’ve guessed it) a free credit report. When you receive it, read about what all the codes mean and check the report for accuracy.

By far the most common query folk have is someone with the same surname and possibly the same address that is on their file and affecting it adversely. If this applies to you then write a letter back disassociating yourself. Check thoroughly for accuracy throughout because you may find that things are there that shouldn’t be.

If you do in fact find that there is adverse information there, you must understand that the credit report agency themselves cannot remove it- only the lender that put the information there can. So you must write to that lender for a full and final settlement upon condition that they remove this entry as explained earlier. But first:

Take the amount you owe them and knock 30% off. Tell them this is all you can afford and that this offer is conditional upon this being in full and final settlement.

Come on, use your negotiating skills I taught you! If you don’t have the money to pay it back, try to get a second mortgage as explained earlier or get a sympathetic ear from your bank manager. Don’t get despondent, this is your freedom we’re talking about here!

If you really can’t find a way to settle your debts and clear your file, here’s what to do. First, set up a monthly payment to all the people you owe money to and get confirmation of it in writing.

Take this and your credit file with you to the bank meeting and write on it next to every adverse entry, “This is in dispute/There is a reason for this- please see document attached”. And on this document give a detailed explanation of why it happened and how you are continuing to make repayments after this short ‘blip’ in your life.

Fat chance? I’ve done this myself on more than one occasion! I wasn’t always wealthy you know; I started off $40,000 in debt so it’s no good thinking that the whole thing seems impossible. Start right now by raising your income and improving your credit. You only need to find one sympathetic banker to get you on the road to freedom.