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Getting your credit card applications approved: rebuilding your credit
Throughout a person’s life, they have dreams and aspirations, many of which revolve around credit. Fair dreams such as owning a home, an automobile or even something like a new laptop or desktop computer are among these.
Seizing those moments when they come along is part of what makes life worth living and it can be one of the worst feelings in the world to have a dream pass you by; worst still if the only reason you didn’t make that dream come true is because of bad credit.
Having no credit or even bad credit is not the end of the world and many people are able to manage just fine without credit. But the fact remains, having good credit is often the key to doing many major things in life like purchasing a home, getting your applications for credit cards approved, getting a job or even getting phone or internet service.
It’s possible to get credit cards with no previous credit history, but the best credit cards (i.e. the ones with the most benefits) will all require good credit.
The good news is that there is a two part plan to rebuilding credit at any point in your life, and after reading this article you’ll be well on your way to figuring out how to do about doing it.
Part 1. As with most recovery programs, the first part of this journey is not only admitting the problem, but figuring out exactly how it originated. With bad credit problems, the reasons are numerous, but fit into two general categories; preventable and unpreventable.
Unpreventable causes consist of serious injury, illness or job loss. Preventable causes are things like compulsive purchasing and an inability to be disciplined with your money. In either case, the first step along the journey to repairing your credit is to a) realize that there is a problem, b) figure out what the cause of the problem is and c) stop the cause of the problem to prevent it from getting worse.
One important thing to remember is that repairing your bad credit and establishing good credit is a task that takes time. The amount of time it takes can range from months to years depending on the degree of your credit problems and just how long they’ve been going on. If you’ve only missed a couple of payments and have slightly poor credit (or maybe even no credit), making your credit fair or even good could be a matter of just a few months.
However, for people with serious credit issues, the process is a lot longer. Things like foreclosures and bankruptcies tend to stick around on a person’s credit information, simply because of the sheer magnitude of events that they imply. Depending on the country, these events can stick around for up to ten years, so your credit file will have poor aspects for some time to come.
But there are ways to lessen the significance of those big events and by taking certain actions now, within just a few years you might see a dramatic rise in the quality of your credit score.
Now that you’ve got the cause under control, it’s time to figure out exactly what you’re dealing with. Obtain a copy of your credit report from any (or preferably each) credit bureau and look over is thoroughly. What you’re looking for is inaccurate information.
Your goal is to make your report completely accurate, even if it means adding negative items to the report that might temporarily hurt your credit. You want your report to be completely up to date and accurate, so that you can start rebuilding your credit piece by piece in a clear and logical manner.
You also have the right to add an explanation (maximum one hundred words) to any negative point in your report. The advantage of this is that when a person requests to see your credit report, they will see your explanation along with the point, giving them both sides of the story.
Once that’s done, your credit report will still look damaged. While you can make the bad points seem less negative with your explanations, as long as they’re accurate, there is no way to remove them. What you can do is start making ‘on time’ payments and eventually these recent actions will take precedence over your past actions, thereby improving your bad credit. All of these things will help to keep the credit card applications headed your way.
Part 2. This is where the going gets rough. You need to have discipline and patience to see an effective plan all the way through to the end. Step one is figuring out all your remaining debt, and taking steps to pay it off. Debt that has payments past due are one of the worst items to have on a credit report, so this is a very important first step towards fixing your bad credit.
Firstly, you’ll need to figure out a payment plan that slowly pays down debt that you’re late on whilst simultaneously keeping you in good standing with the debt that you’ve been paying down regularly. If you decide to work with a collection agency, be sure to enlist their help in coming up with a payment plan that’s reasonable for you. Now comes the important part; once you’ve set up your plan, stick to it! This is an absolute must. Pay all of your payments on time, regardless of how little an effect you might think it had. Your plan might take years to come to fruition, but as long as you stick to it and show people you’re serious about fixing things, your credit will steadily improve, and the new credit card applications will begin to come your way.
Once your payment plan has been in motion for awhile, it’s time to take steps to help with rebuilding your bad credit. The best way to do this is to put in an application for a credit card. Unless you’re dealing with credit cards for bad credit, there is a distinct possibility you might be rejected on your first try. This is okay, because you can use secure credit cards to generate a monthly balance that you pay off in full. If you do this for a while, you’ll find that you can eventually get approved for a line of credit (financial institutions need to see proof of your renewed ability before they extend services to you).
If this doesn’t work for you, another way of doing things is to ask a friend or relative to co-sign a credit card application for you. In either case, you should check your credit report every few months, and about a year after opening your new credit card account do a detailed check of your report to see the changes for yourself and make sure it is accurate.
From that point onwards it’s just a matter of time to improve your credit. In the grand scheme of things, improving your credit is not a quick task. There are no quick fixes when it comes to improving bad credit. Be diligent and patient, and eventually you’ll have the good credit you’ve always wanted.
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