Credit Repair: You Can Do It - We Explain How

No matter what, a bad credit report will more than likely prevent you from acquiring a loan. Except for in very rare circumstances, bad marks will remain on your credit report for up to seven years. Fortunately, credit repair is possible. You can do it. Here is a list of some things you can do to improve your credit rating.

1. Get a copy of your credit report. Before you even start working on credit repair you will need to know where the problem areas are. By getting a copy of the report, you’ll be able to pin point what you can afford to fix on your own.

2. Pay off your bills. If a small amount on an old credit card is the only negative mark on your credit report, try to save up that amount of money, contact the credit card company, and make the payment. Paying off your debts is the quickest way to repair your credit. If you are unable to pay off your bills, you may have to look into some other options. Alternatives could include a debt management plan, a proposal to your creditors, or possibly even personal bankruptcy. Bankruptcy should be your last resort.

3. Borrow fully secured money. Once your debts are all paid off, you can start repairing your credit. A good way to start is by obtaining a secured loan. These are the kind of loans that are backed up by an asset or guarantee, like mortgages for example. You could also think about finding a co-signor. With a co-signor, credit is granted to them, not to you. If you pay the loan, your record will improve. If you don’t, your co-signor will have to pay.

4. Get a secured credit card. Put a certain amount of money on a deposit with a bank, and pledge that money as security for the card. If you are unable to make the payments on the card, the bank will simply withdraw the money from your deposit, and reduce your available credit accordingly.

5. Borrow for RRSP. Banks think of people with RRSPs as responsible, since they seem to be looking towards the future. For this reason, we strongly recommend borrowing for an RRSP. When you get a tax refund, use the refund to repay the loan. By doing this, you are paying off the loan faster than required.

6. Borrow even if you do not need to. Get a small line of credit and just use it to pay off bills. Then, immediately pay off the line of credit. Repeating this step several times will result in improving your credit report.

7. Pay your bills on time. This is the best piece of advice we have to offer in regards to the question of credit repair and credit report improvement. Remember, you want to show the credit system that you’re responsible with your finances, and what is the better way to do that than by proving that you are in full control of your financial life.