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Bad Credit Repair > Bad Credit Repair: How To Repair Your Credit Scoring?
Bad Credit Repair: How To Repair Your Credit Scoring? |
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Credit scoring is taken entirely for granted until it crashes so low as to make it impossible to get credit. But with bad credit repair services, the damage can be repaired. Shakespeare wrote "never a borrower nor lender." It seems that credit
is offered everywhere: banks, building societies, in-store displays, ads
on TV. However, a majority of lenders don't welcome everybody with open arms. In the context of borrowing, the past is not always to put behind. This is where bad credit repair can make a difference. As many as 1 in 5 people have difficulty applying for credit. Bad credit repair is not restricted to the poor. Anybody with past credit problems has limited options. Even those who have never been in debt may find themselves at a disadvantage. There are two primary factors that banks and lenders look for when reviewing credit applications: credit history and credit score. Poor credit history always means a low credit score, but even clean or no credit history is no assurance of a good credit score. A bad credit repair expert explains that lenders see us as creatures of habit. They give importance to past credit problems assuming that the same mistakes will be repeated. Problems that mar chances of future financing are graded according to importance: late or missed payments, mortgage arrears, default, county court judgments and bankruptcy. The latter is usually a hurdle for all mainstream credit. Any owner of a mortgage has to sign a bankruptcy search by the bank or building society. For smaller amounts of credit like personal loans, lenders often get their checks carried out through a credit reference agency. Having no problems in the past thanks to a bad credit repair program offers no guarantee when applying for new loans. Lenders use their own credit scoring rules that estimate how good a risk an individual poses for a loan. Credit-scoring goes further with banks and lenders using the system to determine if an individual is a desirable customer. This results in anomalies, with the same person being accepted by one lender but denied by another, using identical information. Newer banks, and particularly online ones, appear to follow stringent credit-scoring criteria, which shows they want customers who are better-off than those with just a clean credit record. Many have the misconception that is it not the lender but a credit reference agency that decides the credit score criteria. Lenders have no obligation to reveal criteria and most are secretive about the exact details for the purpose of detecting fraud. All established bad credit repair companies give higher scores to homeowners over those who rent. Similarly, permanent employment is rated far higher than self-employment or unemployment. Married, especially married men, score higher than unmarried candidates. Certain criteria sound rather strange, like having a phone line in your name and being on the electoral roll. But most of all a track record of successfully managing credit is likely to matter most. Lenders look for indications that the borrower can handle the debt. This is best illustrated by borrowing in the past without any trouble. A few credit card accounts in proper order or personal loan can score high. Too much debt however has the reverse effect. Several companies offer bad credit repair services with the promise of fixing problems with credit histories and scores, for which they charge. Borrowers with genuine credit problems are advised to first call either a helpline like the Consumer Credit Counseling Service or a trained money adviser. Currently the Consumer Credit Counseling Service is developing a plan to help people with past credit problems to find loans at decent rates on completion of a debt management program. It is expected to be ready later this year. Until then, there's no question as to what those with problems finding a loan need do. Check credit file, try existing lenders first and avoid fees for advice or other assistance. |
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