7 Sure-Fire Solutions To Repair Bad Credit December 6, 2007
Posted by Vedis in : Credit Rating , add a comment
Do you have a poor credit rating? If so, you are one of tens of thousands of Americans with the same problem. In fact, it seems that this has become a national ‘disease.’
Here are some sure-fire solutions to ‘ repair bad credit ‘. Keep in mind, like most ‘diseases,’ credit repair can take some time, but complete healing is possible.
The First Step
The first thing you need to do is find out what is being reported about you. This is easy and inexpensive. For under $10, you can get your credit report from one of the three main credit reporting companies: Equifax, Experian, or TransUnion. (more…)
What About Malaysian Borrowers ? April 18, 2007
Posted by Vedis in : Credit Cards , 2commentsA credit score is based on the information in an individual’s credit report and banks use credit score to manage the risk posed by lending money to customers.
In mature markets like the US, customers are charged different rates on the same loan based on their credit score, a credit rating that represents an individual’s financial creditworthiness as calculated by a statistical model.
Factors that are used for credit scoring include a customer’s payment history, public records, amount owed, length of credit history, new accounts, inquiries made on your credit report and accounts in use. For example, your owing too much, especially you are approaching your credit limit, or matters of public record such as bankruptcies, may lower your score.
With credit scoring, the financial service industry is able to practice risk-based pricing, whereby interest rates are adjusted to mitigate any increased risk with increased cost. If you have a better credit history and a higher credit score, lenders will be more comfortable giving you a lower interest.
What about Malaysian borrowers ? Currently, Malaysian borrowers tend to get the same rate for credit such as credit cards, mortgages and hire purchase, despite having differing credit histories.
Most banks don’t risk yet, which means that although you are credit worthy, you are not entitled to good pricing. This is because bank margins on mortgages today are so thin, it takes banks two years to break even on the commission and cost acquisition. As a result, it is hard to give even better rates to those with better credit history.
While mortgage loans remain tough to negotiate compared with other loan products, the rates personal loans tend to be more sensitive to good repayment capabilities. If banks view you as credit worthy, they may give you better rates, depending on the loan product.
With risk-based pricing, a customer with a good credit history could enjoy up to 6% lower pricing for personal loans, compared with higher-risk person.
2 Options On Repairing Bad Credit History April 9, 2007
Posted by Vedis in : Credit Rating , add a commentSo, how do you clean your less-than-clean credit report ?
There are 2 instrumental options here :
1. Bring the Payments Up to Date. If you cannot make the payments on all your credit facilities, to avoid further spoiling your credit history, you should restructure your loans.
For example: You can lengthen the tenure of the loan so the minimum commitment every month becomes less, or you can look at rate reduction or at the possibility of consolidating your loans with a cheaper loan.
Speak to your respective bankers to figure out the best way to normalize your repayment behavior. It is true enough that most banks will try to help and restructure their customers’ loans.
I have used this option and I find it very instrumental.
2. Consider Debt Consolidation. If you owe on credit cards and have mortgages, you could ask the bank to extend a bigger line for the mortgages in place of some collateral to pay off your credit card bills.
Or you can ask for a top-up in terms of mortgages and use the money to pay your outstanding debt.
As for this option, I have tried once, but to no avail. I was only told by the bank that credit cards and mortgages are of different products. They cannot be consolidated. Well, it is my guess that the bank doesn’t want to hurt my feelings by telling me honestly : You have bad credit, madam !
Upon normalizing the payments, the credit report should then reflect your new clean report.
