Credit Loan > Credit Repair > The ABCs of Credit Repair

Credit Repair

Before anyone can achieve real lasting credit repair a fundamental understanding of what a credit report is, and how the credit score works must be well in hand. It is not reasonable to expect a young child to understand that holding a cup upside down will cause the water to dump out and spill. This same principle holds true for wise money practices, especially credit. All too many people assume that the credit card issuer wouldn’t allow them to charge more than they could repay. This is so far from the reality of how credit cards work it would be laughable if the damaging results weren’t all too real and painfully ugly. This idea is only one such false and damage causing notion, which persists and continues to wreak havoc with people’s lives and credit scores.

The truth is your credit score is more like a report card than anything else. To get good grades, you have to attend class, study, and take the tests. Your teacher won’t excuse you from taking the tests because you weren’t in class or didn’t do your homework, and credit cards are the same. All they do is grant you access to borrowed money. It is up to you to do the homework to know how much you can or can’t afford to borrow.

All is not lost if you made mistakes and now need credit repair. Just like a scholastic report card, change is never too late. You can change, and almost the minute you do, your credit report will begin to reflect the difference. A credit score works like this: When you open a credit account, it is shown on your credit report. Think of each consumer credit account or loan you have as a different subject on your report card. Every credit account that is kept current or paid off in full is recorded on your credit report with highest marks, like getting an A or B.

Consumer credit accounts or loans that are paid late, or go into default are also recorded, but not with high marks, just like getting a D or an F. Like your G.P.A, your credit score is the cumulative score of all the accounts together. To repair credit for good, it is necessary to keep accounts in good standing current, while paying off or getting accounts in default current, as well. Getting credit repair underway is that simple.