Want To Repair Your Credit?

Start with a Plan. Consider a Pre-paid Card. Change your Spending Habits.

Paying your bills on time and using a debt management plan to guide you through the process is the best way to repair your credit.

Since it has become very difficult to purchase anything without a credit card, one thing to consider in helping raise a credit score (and ultimately a credit rating when you are having trouble getting a credit card) is to get a pre-paid card. Many lenders offer a pre-paid Visa or Master Card, which look and work just like credit cards. The main difference is, instead of purchasing things strictly on credit, you make a deposit into a bank account that determines the amount of the card limit. That simply means, if you deposit $100 on a pre-paid card, then you can only spend $100. Often there is a deposit fee required for opening a pre-paid credit account, and your limit is based upon the size of the deposit that has been pre-paid. Pre-paid cards can help with credit repair; and, if in fact your credit is really in bad shape, they may be your only option for repairing it.

The next best solution to credit problems is to exercise debt management skills and learning to pay your bills as on-time as possible. Making wise decisions about spending and only make purposes on the items you really need. Avoid impulse purchases and give yourself time to think through the purchase. Ask yourself, do I really want to spend this amount on this product/service? Remember, bad credit is a tough hurdle to get over once you have developed bad spending habits. Start practicing healthy spending habits as a part of your debt management plan.

If you need help formulating a working plan that you can stick with on a long term basis, don’t be afraid to contact a credit counseling for help.

Take Charge: Understanding and Managing Your Credit Reports

Taking charge of your credit reports can really help you reclaim your life. There is no reason to let bad credit ruin your plans. In order to repair your credit, it is very important to know what your credit report status really is. After all, if you know what you owe, you can take the necessary steps to repay it. It’s equally important to keep in mind that although the three credit bureaus (Equifax, Trans Union, and Experiant) may seem all knowing and all powerful, the information they provide sometimes will have errors. Make it a habit to check your credit reports on a frequent basis.

Obtain a copy of your report from each of the bureaus. But be careful. Don’t just apply for a loan in order to get a free report. Every time you apply for a loan there is a mark made against your credit rating and points accumulate. We recommend that you pay the fees to obtain your report and save money in the long run.

As you create your credit repair plan, be sure to consider long- and short-term steps that you can take. For example, prepaid credit cards will help in the short-term as they allow you access to purchases that can only be made with a credit card. However, they offer little in the line of long-term credit restoration. While they are used like a credit card, the contribution that they have toward building or repairing credit is so small, that it is not really distinguishable on the credit reports.

Other cards will claim they can help restore your credit worthiness by offering you a larger balance card, but they will charge a hefty fee of $200-300 up front. Be warned, some of these companies are scams and should be avoided. When in doubt, check with the Better Business Bureaus to see if they have any complaints on file.