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Repair Credit With 4 Easy Steps

By: Michael Millington

When dealing with debt, credit plays a large roll in your decisions. Debt relief options like debt settlement and bankruptcy can have a negative effect on you credit. While it might be a necessary outcome of debt relief, credit can be negatively impacted by debt itself. Regardless of the cause of bad credit, the goal should be to repair credit. Here are four steps that you can follow to repair your credit.

Repair Credit through Debt Consolidation

You can repair credit through consolidating your debts. Credit is based on two big metrics and other smaller percentages. The two big factors that determine credit are your credit utilization and your on-time payment frequency. If you can consolidate your debts, you can potentially be left with one debt to focus on. Being able to make consistent payments on just one debt can help to gradually increase your credit rating. Plus, you’ll have paid off more of your debts in a short period of time, eliminating debt from your credit score.

Repair Credit through Budgeting

If you do not qualify for a consolidation loan, you can still repair credit on your own. Budgeting your monthly income can help you whittle away at debt. Having a monthly budget can help you organize your expenses and your financial obligations. Making sure you have a budget can help you keep up with your monthly payments. Budgeting can also help you see what expenses are unnecessary, allowing you to save money on a monthly basis.

Repair Credit through Credit Bureaus

One of the most effective ways to monitor your credit is to keep in touch with your credit report. You can receive your credit report for free once a year. However, you can also use certain services to have your credit report available to you all year. If you see any strange or unusual items on your credit report, you can report them to have them investigated. If you pay off a debt and it isn’t removed from your credit report, you can report it as well. This can keep your credit up to date.

Repair Credit through Secured Borrowing

There are certain forms of secured borrowing that can help you repair credit. One way is getting a secured credit card. With a small deposit, you can open a credit card that can help you get your credit back on track. Most secured credit card providers allow for monthly reporting to the three major credit bureaus. This way you can be sure accurate and up-to-date information is being reported. You can also borrow against your savings with certain banks. If you can make payments on this debt regularly, your credit will see an improvement over time.