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Your Credit Card Application has been Rejected: Now What?

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You may be quite surprised to find that your latest credit card application was rejected. Ouch!

After licking your wounds, there are a number of things you can and should do following a credit card rejection:

• Even if you applied online or via phone for a credit card, you will receive a written notice in the mail regarding your rejection. It is important to read this letter so you can gain some insight regarding your reason for rejection. If the letter does not give you the answers you are looking for, you should contact the credit card company directly and ask them for a more detailed explanation. After all, you cannot change or improve things if you don’t know what to change.
• You are entitled to a free copy of your credit report once a year; and again if you are rejected for a credit card offer. It is very important to take them up on a free copy of your credit report, particularly if you don’t understand why you were rejected. After you receive your free credit report, carefully examine it for any unknown charges, errors or discrepancies, and immediately report them to the appropriate credit reporting agency.
• Take the information you gleaned from your credit report to better your credit score. Although it stings to be rejected for a credit card, the best thing you can do is work hard to improve your credit score. Often times, simply by paying your bills on time and curbing your credit card debt for a period of as little as six months, you can raise your credit score high enough to be approved for a credit card.
• If you still want the many conveniences of having a credit card, but your credit is not strong enough to qualify for an unsecured credit card, consider applying for a secured credit card. A secured credit card, because it requires a cash deposit typically equal to your credit limit, allows individuals to be approved for one even if their credit score isn’t great. Plus, a secured credit card can help you begin building a strong credit history and improve your credit score.

Picking up the Pieces: How to Rebuild your Credit after a Divorce

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Along with the dissolution of your marriage could come the dissolution of your finances and good credit.

Unfortunately, not all marriages end peacefully and, a result, not all credit scores are kept intact. If you have made it through to the other side of a divorce, but are financially wrecked as a result, you will need to begin making moves to repair your credit so you can move on. Here’s what you need to do:

• Any joint credit cards should be immediately canceled – Although any outstanding credit card debt will still be half of your responsibility, you can cut off any future debt at its knees by removing your name from all joint accounts.
• If you are a woman who relied on your husband’s credit over the years, it is now your time to begin building your own credit history – The best first step is to take out a credit card in your name. If you don’t have enough of a credit history to do this, take out a secured credit card. Secured credit cards are ideal for individuals with no credit or poor credit, and they are a great way to begin building a positive credit history.
• Open a bank account in your own name – A great place to open a personal bank account is through a credit union, as it will allow you to not only begin establishing a credit history, it may also serve as your lender if you need a car loan or credit card. In fact, a credit union is often the best place to go if you need to apply for a credit card.
• If you have a loved one who is willing to help you, ask them to “piggy back” you onto their credit – In other words, you may consider asking a loved one to co-sign for a credit card or loan or allow you to become an authorized user on their credit card. Although this situation is not for everyone, it can be a great way to rebuild your credit and begin your new life.

Essential Tips for Rebuilding your Credit after a Bankruptcy

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Make no doubt about it, bankruptcy will destroy your chances of getting any type of credit for quite a few years. However, after your bankruptcy is discharged it is time to begin rebuilding and reestablishing your credit.

There are certain things you should do and certain things you shouldn’t do, however, when it comes to making the right moves regarding your credit:

• As soon as your bankruptcy is discharged, apply for at least two credit cards. It is important to understand that you will likely qualify for traditional, unsecured credit, so you may have to first start with a couple secured credit cards. Secured credit cards, while they act the same regarding the rebuilding of your credit, are different because they require a cash deposit equal to your credit limit. Just like a typical credit card, you will be expected to pay the bill each month; if you fail to do this, the credit card company can then use your cash deposit to pay the bill and close your account. Your payment history with your secured credit cards will be vital when it comes to reestablishing your credit, so take these seriously.
• After about 12 to 18 months of making regular payments on your secured credit cards you can then attempt to apply for an unsecured credit card. At this time, you will have likely established a good credit history using your secured credit cards. Avoid opening too many new credit card accounts at once, though, as this could lower your credit score.
• Avoid closing any credit card accounts, regardless of whether you spend on them or not, as a good portion of your credit score is made up of your available credit. The more credit accounts you have open, the higher your available credit.
• Make purchases on your credit cards each month, but also make a point to pay them off in full when the bill comes. Adopting this responsible habit will allow you to enjoy the benefits of good credit without becoming overwhelmed with credit card debt.

Credit Repair: How You Can Help Yourself

Credit Repair

Maybe you’ve faced some difficult times. Maybe you were, admittedly, a tad bit irresponsible at some point. Whatever the case, you’re credit score doesn’t shine, and you’re probably finding yourself jumping over hurdles to obtain any kind of credit or loan. Once obtained, you are finding yourself paying higher rates, or maybe you’re hearing “No way!” far more often than you’d  like to.

The good news is there are things you can do to improve your credit situation. You have to know what you’re looking at as far as your credit score and debt, be ready and willing to face your credit score and work to improve it, and you must be committed to seeing the process through, as well as maintaining your credits score after improvement.

Hiring a Professional

Hiring a professional to help you to repair your credit is an individual choice. While it is not absolutely necessary – you can repair your credit on your own – it might e a wise idea for those who are not financially savvy or for those who fear treading the muddy water of credit repair alone. A credit repair specialist can advise you and help you to repair improve your credit score; they can even negotiate your payments for you, often saving you money off the original balance. However, the service does not come without a cost, so if you are willing to pay for help and feel you need it, there’s nothing wrong with doing so.

However, should you want to just take care of credit repair on your own, here’s some smart DIY tips to help you pay off your debt and improve your score. Even if you want to forgo the professional credit repair agent, you might still want to consider the invaluable services of a consumer credit counselor. They can help you to better understand your credit, finances and how to create a budget and stick to it.

Keep up with your credit report and score

You are entitled to one free report from each of the three credit bureaus every year. Take advantage of this and stay on top of things. Knowing your score and what’s  in your report will help you tom pay down your debt and substantially improve your credit. Review the reports, highlight important things and dispute discrepancies. You want your report to be accurate and only you can ensure that it is.

Tackle those debts!

Find out what it is that you owe and who it is owed to. Bring accounts that are past due, but not yet charged off, up-to-date.  Pay off those charge offs and work with debt collectors and creditors to make payment plans and pay off what you owe. Remember not to let your accounts in good standing wind up on the back burner while you take care of past due debts. It is not an overnight process. Take things one step, one payment at a time. Pay your current bills as usual and work to make payments you can afford on the rest.

Maxed out? Pay the limit back down

If you are maxed out on your credit cards, it is going to cost you in points on your credit score. Work to pay your cards down below the credit limit and then to pay them off completely. This will substantially improve you score. Remember, your total debt vs. your total available credit makes up 30% of your credit score.

Build that credit up

Once things are paid off, work hard to build your credit back up. Credit cards and loans that are being paid and reported on time are great ways to do this. Another way is to try and open a new credit card account and keep it below the max and paid on time. Only make one or two applications, so as not to impact your credit score with tons of credit inquiries. If your past credit negatively impacts your chances of getting approved for a regular credit card, try going for a store card of some kind. You could also try a secured credit card, which has a slim denial rate, since you pay a deposit for the card.

Follow these steps, and i due time, you will notice a major improvement to your credit score. Maintain it and you will open plenty of doors in the future that you never imagined possible before your credit was repaired.

Avoiding Credit Repair Scams

Credit Repair

A good credit history is an important and valuable element to maintain. Bad credit can impact your life, preventing you from obtaining loans, housing and these days, even a job. You want to fix that bad credit, and though it is possible to do it yourself, some people would prefer to have a professional leading the way. Call it peace of mind or having a hand to hold, it often helps to have someone who knows the industry and knows how to explain things to you, offer advice and make things happen.

Ideally, a credit repair agent only has your best interest in mind. Unfortunately, that is not always the case. In a world where it is all to common for profits to take precedence over ethics, there are many credit repair scams appearing on the scene. These companies offer promises in pretty little packages. Unfortunately, they can’t and don’t deliver.

That’s not to say that all credit repair offers are not legit. In fact, there are many out there who are reputable and don’t make empty promises. However, the scammers are the ones who want a fortune up front and leave you hanging in the end. Face it, if you had the kind of money that they want up front, wouldn’t you just start paying the debts on your own?

An informed consumer is a smart consumer. Here are a few tips to help you avoid the pitfalls of credit repair scams.

Promise #1: Erasing Information From Your Credit Report.

No wonder so many people fall for this one. The image of some guy standing over your credit report with a big pink eraser, just scrubbing away the mistakes, does have its appeal. Unfortunately, this is one of those promises that they not only can’t keep. Information on your credit report can not simply be erased. Inaccurate information can be disputed and removed if and when found to be inaccurate, however, accurate information will remain on your credit report for 7 years and as long as 10 years, if you file bankruptcy. Accurate information can not be removed just to make your credit report look better.

Promise #2: Pay Us Large Sums of Money Up Front & We’ll Work Our Credit Magic

Nope. Not even close. Not only will this not happen, should you fall for it, it’s illegal. These companies can not ask you to pay before they deliver on their promises. They must provide you with a contract, inform you of your rights in writing and offer you a minimum of three days to change your mind and back out.

Promise #3: We Can Create a Second Credit File for You.

The idea behind this is that you can have another file to use for credit purposes, obscuring the information in the original file, allowing you to obtain credit more easily. First of all, this is what they call fraud. You can not legally obtain credit by obscuring or omitting the truth. Companies promising to create another file or “file segregation” are offering you an empty promise. It’s not only wrong;it really does not work.

Remember, you can dispute and correct mistakes on your credit report yourself by contacting the three reporting bureaus. You may also add an explanation and can easily work to improve your score on your own. However, the help of a professional is often a good idea, so look for a credit repair company that does not sound to good to be true and follows the guidelines as set above. A consumer credit counselor might also be a great choice to help you get your credit back on track.

Credit Repair Companies: Why you shouldn’t have to Pay for Repairing your Credit

Credit Repair

The tough economic conditions this past year have left millions of consumers in financial straits. From the effects of the recession and credit industry to the tumbling housing market, credit card consumers across the country are finding it difficult to keep up with their credit card payments and are slowly destroying their credit in the process.

If you have been a victim of the economy and you are drowning in a sea of credit card debt, you may be tempted to contact one of those credit repair companies you often see advertising on television, radio and even on billboards. They often offer to repair your credit so that you can get approved for a car loan, a home loan or personal credit.

It may sound quite tempting, actually. The thought of paying a company to pull a quick fix on your credit may just solve a host of problems. But before you jump into the arms of one of these credit repair companies, there are a few things you should consider:

•  No one can legally remove information from your credit report. Regardless of what these companies may promise you, it is simply illegal to have any information removed – unless, of course, you find an error or discrepancy, in which case you must request an investigation by the appropriate credit bureau.

•  The only thing that will remove your bad credit rating is time – and responsible credit behavior.  Your negative credit card information can only be reported for seven years (bankruptcy is ten years). Unpaid judgments go back seven years, or until the statute of limitations ends.

•  Improving your credit score can only be accomplished one way: paying off your debt. In other words, instead of trying to hide from your creditors, contact them and set up a reasonable payment plan, if possible. You will feel relieved to end the stress of avoiding the creditor, and you will immediately begin repairing your credit.

•  If you choose to contact a credit repair company, make sure you receive the brochure, “Consumer Credit File Rights under State and Federal Law.” This brochure should clearly outline the company’s fees, as well as your rights and obligations.

•  Consider seeking help through a non-profit consumer credit counseling service, which is almost always free of charge.

How to Begin the Process of Rebuilding your Credit Rating

Credit Repair

If you have a damaged credit score from past problems or indiscretions, don’t despair. There are ways in which you can work to rebuild your credit rating so that you can look forward to a more positive financial future. Below are initial tips that will get your credit on the road to a positive credit score.

1. Order a copy of your credit report. Hiding from your credit problems will not make them go away. Therefore, ordering a copy of your credit report from all three credit reporting agencies is an excellent, first step in taking accountability for your past credit mistakes. It is also the best way to simply see where you are and to leave no credit blunders left unturned, so to speak.
2. Call your creditors. There is no better way to address your credit problems than to simply contact your creditors. Most creditors will be more than happy to work with you to find easier repayment terms so that you can begin righting your credit wrongs.
3. Pay off your existing debt to lower your debt-to-income ratio. Repairing your credit is an important step, but lowering your debt-to-income ratio is also important. It is therefore extremely important to develop a game plan to pay off your existing debt, and to stick to it!
4. Do not apply for any new credit. Instead of incurring more debt, avoid taking out any new credit cards, personal loans or auto loans during this time. Instead, focus all your attention on your existing debt and how you can pay it off.
5. Don’t ignore other types of monthly bills. It’s often the bills we don’t think about that have the biggest impact on our credit scores. Water bills, electric bills, phone bills and gas bills are just some of the monthly bills we all pay. But many of use fail to recognize that not paying these bills in full or on time can have an adverse effect on our credit. Bottom line: don’t forget about even the smallest of debts when it comes to rebuilding your credit score!
6. Find ways to increase your payments. One of the best ways to improve your credit is to reduce your debt. And a great way to make a greater impact on your debt is with larger, monthly payments. Don’t think you have extra money each month? Make a budget and stick to it! You may be surprised to find that your monthly “incidentals” are preventing you from paying off your debt!