A negative or positive credit score is largely depended on a person's credit settlement history. An accumulation of overdue and defaulted payments will result in a very negative credit score and have a dismal effect on your credit worthiness. Aim to control your credit status by having your payments on current' or pending' terms. Here's some tips that will help you to tackle long over due payments in an efficient and effective manner.
Make some initial payments to bring your loan from being past due to current status.
Pay the relevant amounts to renounce the charge offs on your past due accounts.
Interact with your debt collectors to arrive at settlements with regard to your collection accounts.
If your credit report reflects debt collection, a credit repair process will have to be implemented immediately with a prime concern on eliminating the debt collection entry from the report as this will make it impossible for you to obtain any further loans to facilitate credit repair and will have a negative effect on your credit score. Negotiate with the debt collectors to arrive at a feasible solution that will reflect positively in your credit report.
Ideally you can make a settlement payment negotiated with the debt collector in respect of the overdue amount and request the lender to cancel the debt collection entry from your credit report.
In most cases the debt collector will refuse to delete the information from your credit report until payment is made in full to eliminate the entire arrears, if negotiations are not successful on a settlement amount, make arrangements to pay the total outstanding in exchange for the information being taken off your credit report. Once your credit score is back to being positive you can explore building credit in order to meet the amount you spent to settle the over sue loan.
Sometimes lenders will not be willing to take off the entry even on complete settlement if their policies state so. Under the circumstances you should negotiate with your lender to update your credit report as paid in full. Then even if the entry still remains in your credit report it will not reflect in your credit score.
If you are unable to meet the above conditions due to cash flow restrictions, try to repair credit by making a partial payment on the outstanding loans and ask the collector to update your records as paid or settled. However, such a payment will not significantly enhance your credit score.
Make sure that all transactions and final outcomes of your negotiations in relation to credit repair are in a legal binding written form. In case of a dispute it will help you to seek the advice and guidance of the credit bureau and the documentation will be your proof of testimonial. When you build credit you should remember that in addition to your legal obligations you are morally responsible to settle off your debts. Outstanding payments will reflect in a negative credit score and potential lenders will question your credit worthiness if you continue to default on your credit cards and other loans.
Showing posts with label Repair. Show all posts
Showing posts with label Repair. Show all posts
Friday, August 24, 2012
Monday, June 18, 2012
Credit Repair: Before Or After?
We receive many questions regarding whether one should undertake credit repair actions or hire the services of a credit repair agency before or after consolidating debt. As usual, the answer to this question is not a simple one and will depend on many variables. Credit and debt problems change from one debtor to another and no general solution is available for all. However, there are some guidelines that can be followed in order to achieve positive results.
In order to understand what follows it is important to give a general idea of what debt consolidation and credit repair effects are. Both a debt consolidation and credit repair process have implications on each other and thus a correct combination of both in terms of time and opportunity can produce the best outcome and achieve the most advantageous results which is what everyone wants when undertaking such processes.
Debt Consolidation Effects
Debt consolidation produces several effects that can alter a credit repair process. For starters, depending on the strategy used, the amount of creditors may be reduced. If the process implies a debt consolidation loan which is used to repay all or the majority of the outstanding debt, then, all the creditors (or most of them) will be replaced by the new lender and thus, though some entries on your report may remain, from now on, you have a fresh start on your credit history.
If a debt consolidation loan is not the way to go, debt consolidation will imply only negotiations with current creditors to reduce debt and agree new repayment programs. Debt consolidation when it implies negotiation can also include the removal of negative entries on the credit report. In any case, the debt reduction alone will improve your credit score and history. However, certain debt consolidation agencies chose to default on several loans and lines of credit prior to negotiations in order to obtain better results and this implies new bad entries on your credit report.
Credit Repair Programs Effects
Credit repair programs have different effects depending on the stage of the program. At first, unfortunately, credit repair programs tend to make the applicant's credit score to drop to lower levels than the ones before joining the program. This is mainly due to the fact that credit repair programs often imply the interruption of payment of certain debts to make room for negotiations.
At a later stage, on the other hand, your credit score will continually increase as negative inputs on your credit report keep getting removed by creditors or by the mere pass of time. The interaction of credit repair programs and debt consolidation programs is not unpredictable. Moreover, there are agencies that provide both services.
The combined efforts of credit repair and debt consolidation can get you back to a good credit and financial stance in as little as two years. For some this may sound as a long time but let me assure that it is not. Investing two years time and efforts will result on a good credit score and access to all financial products available for those that never had bad credit. Thus, the answer to the question asked at the beginning of this article is simple: neither before or after, at the same time.
In order to understand what follows it is important to give a general idea of what debt consolidation and credit repair effects are. Both a debt consolidation and credit repair process have implications on each other and thus a correct combination of both in terms of time and opportunity can produce the best outcome and achieve the most advantageous results which is what everyone wants when undertaking such processes.
Debt Consolidation Effects
Debt consolidation produces several effects that can alter a credit repair process. For starters, depending on the strategy used, the amount of creditors may be reduced. If the process implies a debt consolidation loan which is used to repay all or the majority of the outstanding debt, then, all the creditors (or most of them) will be replaced by the new lender and thus, though some entries on your report may remain, from now on, you have a fresh start on your credit history.
If a debt consolidation loan is not the way to go, debt consolidation will imply only negotiations with current creditors to reduce debt and agree new repayment programs. Debt consolidation when it implies negotiation can also include the removal of negative entries on the credit report. In any case, the debt reduction alone will improve your credit score and history. However, certain debt consolidation agencies chose to default on several loans and lines of credit prior to negotiations in order to obtain better results and this implies new bad entries on your credit report.
Credit Repair Programs Effects
Credit repair programs have different effects depending on the stage of the program. At first, unfortunately, credit repair programs tend to make the applicant's credit score to drop to lower levels than the ones before joining the program. This is mainly due to the fact that credit repair programs often imply the interruption of payment of certain debts to make room for negotiations.
At a later stage, on the other hand, your credit score will continually increase as negative inputs on your credit report keep getting removed by creditors or by the mere pass of time. The interaction of credit repair programs and debt consolidation programs is not unpredictable. Moreover, there are agencies that provide both services.
The combined efforts of credit repair and debt consolidation can get you back to a good credit and financial stance in as little as two years. For some this may sound as a long time but let me assure that it is not. Investing two years time and efforts will result on a good credit score and access to all financial products available for those that never had bad credit. Thus, the answer to the question asked at the beginning of this article is simple: neither before or after, at the same time.
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