Let’s say you want to do consumer credit repair. Lenders will be looking at five areas. Those factors all start with C: character, capacity, capital, collateral and conditions.
Character
Your financial trustworthiness is character. It’s great if a lender knows you or your family personally. This is more often determined by your credit score. Whether you’ve made payments on time can play a big part here.
Your credit report will show 30, 60 and 90 day delinquencies. Credit card companies are often the most aggressive about reporting. As you could guess, negative entries count against your credit score. You’ll want your report to show all accounts in good standing for working to repair consumer credit.
Capacity
Capacity is your cash flow. You have to have enough money to handle the debt you’re asking for. They look at your income and expenses for each month. Lenders rightfully want to make sure you have enough money to make the payments.
Capital
Capital shows that you know how to manage money long term. It’s a look at your net worth. Lenders don’t want to give money to people who need it. They want to lend to people who have shown to be able to use it wisely to build up more assets. That’s a better lending risk for them.
Collateral
Collateral secures the debt. Some loans like mortgages are backed by the promise to return property if the loan is defaulted on. If there’s something to get back, there’s less risk to the lender. The last thing the lender wants is to have to deal with a returned house or car but it’s still less risk if there’s that incentive to stay current.
Conditions
The conditions are market and economic conditions outside your control. With the recent economic recession, lending guidelines have become more strict.
This also applies down to your local lender. If a banker is having a bad day or maybe you look at him funny, that could affect whether you’re approved or not.
To repair consumer credit, focus on the five Cs: character, capacity, capital, collateral and conditions.
By: Tiffani G Peterson
Posts Tagged ‘Enough Money’
Consumer Credit Repair – The 5 C’s
March 7th, 2010Can A Credit Repair Agency Really Help?
January 14th, 2010
The purpose of a credit repair agency is to help those whose debt burden has gotten out of control to take charge of their financial lives and to improve their credit scores. But even the best credit assistance agencies cannot remove the stigma of years of missed or delayed payments, unless you can prove that the problems were justified.
The only items which are ever permanently removed from a person’s credit history are a personal bankruptcy, which remains for ten years, and any debts which your creditors have written off. But fixing your credit report is definitely doable. There are even some credit fixing agencies which promise that, for enough money, they can reward you with a pristine credit history, but if you had that kind of money, you probably wouldn’t need to have your credit history repaired!
The truth is that while you as an individual can repair errors on your payment history like incorrect payments or personal information like your name, age, address, gender, or marital status, if you supply documentation, no one has the power to eradicate a history of missed or late payments.
If you want to have something personal on your credit history changes, simply write to the reporting agency with your documentation, which they will check. If they have made a mistake, they will repair it and you can see the change the next time you request your credit report.
What A Credit Repair Agency Can And Can’t Do
The only thing a credit help agency can do to repair your credit history is to do the same thing: send your documentation to the credit reporting agency to correct a mistake. If a credit score repair agency leads you to believe they can completely eradicate your poor credit record, they are not being honest. And while some companies will take advantage of a legislative loophole to add good credit to your history of poor credit, that could change at any time.
Do not go looking for a credit repair agency if you want anything more than a mistake in your personal information corrected on your credit history. If you pay for anything more than that you are throwing your money away, and you don’t even need outside agency help to fix most of the inaccurate information on your report. If you review your credit history onece each year, you can correct any inaccuracies yourself.
If you notice, in reviewing your credit history, that some of your financial transactions are missing, it is nothing to become alarmed about. Not all the companies with which you do business report to the credit agencies, even though their failure to report transactions could make it hard for their customers to establish credit histories. But no agency can persuade them to add transactions to credit reports if it is against their policies to do so.
As long as you use your credit responsibly, and keep on top of your credit history report by reviewing it once a year for errors, you might very well go through life without ever having to think of using a any type of credit score help agency!
By: Wade Robins
Bad Credit Report Repair Companies
October 25th, 2009
Despite what the ads might lead you to believe, credit repair companies don’t have any special relationship with the credit bureaus to make credit repair easier. With all of the advertisements for credit repair, a person might think that if you give them enough money, some companies are able to simply wave a magic wand, and all of their mistakes, late payments, charge offs, tax liens, and even bankruptcies would disappear from their credit report. While it can be tempting to listen to the credit repair companies which seem to promise miracles overnight, in reality your credit repair journey will be a long and slow one. Credit repair and debt consolidation companies like to make promises about delivering instant credit improvement. But in truth, credit repair companies cannot substantially improve most peoples’ credit reports or profiles. They can’t permanently remove bankruptcies, charge-offs, late payments, and other negative information from your credit reports, especially if such information is not obsolete. However, some unscrupulous companies might suggest certain dubious short-cuts that are absolutely illegal and should be avoided. These companies try to prey on your bad credit situation.
If you turn to the Internet or classified ads when beginning your research into credit repair, you’ll likely notice many companies offering credit repair services. I am sure you have received countless E-Mails and regular mailings for these companies. Have you seen some of the outrageous promises and fees that *some* credit repair companies charge. Many of these companies promise what seems to be “Too Good To Be True”. Credit repair companies are only allowed to dispute the items on your credit reports that you tell them are incorrect. While there are some highly reputable companies helping consumers repair their credit, there are many scam artists. You should be wary in dealing with these companies — not only are many of them scams, in most cases you can repair your own credit. One must have come across countless ads credit repair agencies making all claims about converting your bad credit into a perfect one. Credit repair and debt consolidation companies like to make promises about delivering instant credit improvement.
Using a company or an individual to fix your credit score may seem like a great idea at first, but it may have 0 effect on the future purchase or refinance of a home. You would be far better off working to repair your credit reports yourself or enlisting the help of a legitimate credit repair company. Cheaper than hiring a credit repair company and keeps you in control at all times. Any person or company that tells you otherwise is not being honest and is simply after your money without regard to the accuracy or benefit of the information or services they provide. Credit Repair is an entire process and the very first step is controlling your debts. Summary Credit repair is a three-part process: fixing your credit report, conquering debt, and rebuilding credit.
source: http://www.mkemortgage.net/content/credit_report_repair_975.htm
By: Darin Sewell
