How To Repair Bad Credit

Can bad credit be repaired? Most consumers believe that
once you have bad credit, then you will never again have
good credit. Bad credit is extremely difficult to repair,
however, it can be done. What you need to keep in mind, is
that bad credit only lasts as long as the delinquencies on
your credit report last. Once the negative items on your
credit report are removed, then you will once again have
good credit.

Okay, so what is the time limit for negative items to stay
on a credit report? Bankruptcies stay on the credit report
for about ten years and negative items stay on for about
seven years. Why do I say "about" seven and ten years for
negative items? Typically, the negative items should be
removed after seven and ten years, however, it often takes
a bit longer for these items to be removed by the credit
bureaus. In general, the seven and ten year periods are
calculated from the date that the event took place.

One way to repair bad credit, is to negotiate a settlement
of delinquent debt. Generally, you can negotiate with the
debt collection agency or bank that owns your delinquent
debt. A rule of thumb, is to try and pay about thirty to
fifty cents on the dollar. You can usually get an
agreement, in which the debt owner, will agree to place a
"settled in full" statement on your credit report, once you
have paid the agreed upon amount. Never pay the negotiated
debt settlement amount, until you have an agreement in
writing. This is because once you have paid this amount,
the debt owner, has no incentive to place the "settled in
full" statement on your report. If you pay the debt, and
the debt owner fails to place the "settled in full"
statement on your report, without an agreement in writing,
you will have no proof that the debt was settled in full.

If you don't have any money to repay any portion of the
delinquent debt, then another way to re-establish good
credit, is to start taking out small loans at a bank or
loaning institution. This method also works by
establishing timely payments through secured credit cards.
It seems quite bizarre, but you can actually drown out bad
items with good items. What this simply means, is that if
you have fifty loans that are in good standing and ten
loans in bad standing, the loans in bad standing, will be
eclipsed by the loans in good standing. Keep in mind, that
you will have to take out very small loans, and pay these
loans back on time, in full, every time. Paying off about
twenty to thirty small loans on time, will make a
significant difference in calculating your credit score.
Many individuals credit scores can raise a few hundred
points, in a relatively short period of time, with this
method.

What if you have bad credit because of fraudulent activity?
First, let's specifically define fraudulent activity. The
majority of the consumers define fraudulent activity, as
individuals who take out credit cards or loans, based upon
someone else's identifying information. That is only
partially true. Fraudulent activity, can also be a credit
card company illegal raising an interest rate in violation
of contract terms, a loan being called in before it is due,
a bank demanding an illegally accelerated payment of a loan
or credit card, or any other violation of law by a
financial institution regarding the repayment of a debt.
Most consumers fail to recognize when financial
institutions commit fraud. The simple solution for fixing
bad credit because of fraudulent activity, is to dispute
the activity on your credit report. In real estate, the
motto is: location, location, location. When it comes to
fraudulent credit activity, the motto is: dispute, dispute,
dispute. Consumers have the right to dispute any and all
fraudulent activity on the report, whether by individuals
or financial institutions, by contacting the three credit
bureaus and disputing the debt, in writing.

Bad credit, can and should be, repaired. With a little
effort and time, bad credit items can be either erased,
settled, or eclipsed by good credit.

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Bryan Pringle, Ph.D., has written many articles on the
credit industry, and is the webmaster of websites offering
news and information regarding credit cards. For more
information, please visit:
http://www.apply-forcreditcards-online.com