Repairing Your Credit
By
Max Hunter
We
live in a consumer society where it seems like more attention is paid
to your credit record than to your criminal background. Credit has been
elevated to a position where it permeates every factor of a person’s
life and has even crossed over into the realm of being a moral
question. Have you ever been made to feel guilty or embarrassed because
you can’t get a loan? What about having your credit card rejected at a
restaurant or department store? It’s not just that you don’t have money
readily available, it’s that you suddenly become a pariah in the eyes
of some cashier. And, of course, to everyone that is standing around
within hearing distance.
Nearly everyone has been in one of these situations one time or
another. And, it begins to weigh heavily on your psyche. Don’t despair!
Having bad credit does not mean you are a disreputable person AND there
are very few credit situations that are beyond repair. You just have to
know what steps to take and what order to take them in. If you are
careful, payday loans can be an excellent means of reestablishing your
credit.
There are several ways you can go about clearing up your credit situation.
Payday Loans
A payday loan may be able to help you re-establish your credit. The
way it works is like this. Get the best loan deal available, with the
least fees. Make it small, say for $100. If you can find a lender who
only charges $10 per hundred, you will owe $110 on your next payday.
Even if you have to pay a $25 charge for the $100 borrowed, the total
payment is still only $125. Pay it off on the due date, in full. Do not
be tempted to roll the loan over because it will just cost additional
fees. Don’t borrow unless you know you will be able to pay back the
full amount on the date due and do not borrow from multiple lenders.
Repeat this process several times to build a good reputation with the
company. Payday transactions are ones that may or may not be reported
to credit agencies, but you can generally add good reports to your own
credit profile. It may cost $2-$3 per lender and you must ask the
lender before proceeding.
Credit Cards
According to the Credit Repair Institute, a Visa or MasterCard are the best credit references you can establish.
At first glance, this may not seem like a great solution because
you are thinking that you probably can’t possibly get a credit card.
However, there are banks and other lenders out there who will issue
limited value credit cards to people with bad credit, on a couple of
conditions. First, you will probably have to pay a fee to get the card
in the first place. Then, it will probably be limited to a small
amount, say $200. Pay the fee, get the card (making sure that it
doesn’t charge huge interest) and use it very, very wisely. In other
words, go make a small purchase on the card instead of paying cash for
something that you already intend to buy and have money for. Then, use
the cash you already had set aside to pay the credit bill, before the
due date, so there are no additional interest fees. Repeat the same
process several times, over several months. Always make sure you are
not buying something extra that you may not have money to pay for, just
use the card to establish good credit.
Other banks issue secured credit cards for which you deposit a
particular amount, for example $200. Make the deposit, get the card,
and then make several small charges on it – again ones that you know
for certain you can pay back in full before the due date so that you
don’t accrue any extra interest fees. Shop around for the card and make
sure you get the best deal available in terms of annual fees, annual
percentage rates, grace periods and any surcharges that may be
attached. Secured cards are nearly as good a means of bolstering credit
as unsecured ones.
Get a Loan
That sounds like crazy advice, but if handled the right way, it can
quickly rebuild your credit. According to the Credit Repair Institute,
this is a fast and reliable method, and can be done with as little as
$400. It involves opening a savings account at a local bank with about
$400. After the account is established, ask the bank for a loan and
tell them you want to secure it with the savings account. They are
likely to grant you at least 70f the money you have in savings and, in
some cases, up to 100í
Take the money from the loan and deposit in a savings account at a
second bank, get a loan against that and deposit that in a third bank.
The money borrowed from the last bank can help pay the first few
payments on the others. Make certain that you make payments on time and
as agreed. Also make certain that the banks report your payment history
to the three major credit bureaus, monthly.
According to the Credit Repair Institute, this is the quickest way
to rebuild credit quickly. In the meantime you will be paying for it by
paying interest, but the good news is that the interest earned on the
funds deposited in savings will partially offset the interest payments
you will be making back to the bank.
About the author:
Max Hunter is the author of many
credit related articles. If you are looking for help with Payday loan
or any type of faxless loans please visit us at http://www.PaydayLoanChoice.com
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