Reversing Bad Credit: Credit Repair and Debt Negotiation

Most people don’t understand the concept of “bad credit” until it is too late.

Hopefully, we’ve caught you before your credit score tanks – use this as an opportunity to educate yourself. If you’ve already damage your credit, here are some tips to get things back on track.

What Causes Bad Credit?

Bad credit can be the result of any of your accounts being turned over to professional debt collection agencies, a mortgage being over 30 days late, an installment loan being paid over 60 days late, or just having credit accounts that are over the limit.

If any of these scenarios sound familiar, then you’re probably looking for ways to fix your credit so that you can start gaining back on your credit score. Whether you’re looking for a job that does a credit check, trying to buy a car, or applying for a loan, there are plenty of reasons to get your score above the 720 mark.

There are two main ways to repair credit, so make sure to do your research and pick the one that’s best for you.

Option One: Credit Repair

First there’s always credit repair. This is the quickest way to start repairing your credit as it focuses on correcting any claims on your credit statement that you wish to dispute.

Fortunately for you, if you make notification of your intent to dispute, the credit bureau must investigate and resolve your issue in 30 days. Seriously, that’s the law. So naturally, this sort of resolution is the quickest and the cheapest as it doesn’t even require a law firm or lawyer to do it for you. Disputing items on your credit statement is up to you and you alone.

Of course, to make this sort of repair to your credit, you’re going to want to be as thorough as possible. Sometimes errors occur in the statement, so be sure to go over it with a fine-toothed comb before submitting to repayment. Unfortunately in this technological age, there are more and more ways for identity thieves to steal personal information. So as you search, be sure to keep your eyes open for suspicious account activity. If you find some, file a dispute. Doing so will be the first step towards increasing your credit score.

Option Two: Debt Negotiation

The second option for repairing credit is known as debt negotiation. This method is exactly what it sounds like; you – along with your creditors – work to reduce the amount of money that you owe on any account.

According to a Clearwater debt attorney from this office, debt negotiation produces surprising results. Working with your creditors can help reduce your outstanding balance by up to 60%. This sort of settlement agreement can be established by you, a professional negotiator, or a debt attorney. Once established you can start paying your amount until it is settled.

Of course your debt will still be reported on your credit score for seven years, but by settling your debt you’ll be able to increase your total income as well as increase your credit score.

Unmanageable debt can be the scary troll living under the bridge who demands money for fare that you just don’t have. If you feel overwhelmed by your expected payment plan, then debt negotiation may be for you. The amount of over limit fees and increasing interest rates can lead to your account being sold to a collection agency, which only makes you fall deeper into debt. Consider debt negotiation so that you can take back control of your accounts.

Thankfully with the right method of credit repair you can find that your mountain of debt has been transformed into a much more manageable molehill. Putting your finances back into perspective can help you get back on track and back in control.

Featured image flickr.com/photos/lendingmemo/11442336093/sizes/z/

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