| Consumer Credit Repair: What They're Looking For |
 |
 |
 |
| Written by Tiffani G Peterson |
| Monday, 26 October 2009 21:32 |
|
If you've been trying to figure out how to do consumer credit repair, there are five major C words to lenders. Those major areas are character, capacity, capital, collateral and conditions.
If you've been trying to figure out how to do consumer credit repair, there are five major C words to lenders. Those major areas are character, capacity, capital, collateral and conditions. Character Lenders need to know how well they can trust you. That's what they mean by character. A personal relationship with a lender is great. Otherwise it's usually up to your credit report. Late payments don't show good character for example. Reports of 30, 60 and 90 day delinquencies don't look good on your credit as you can imagine. Every negative entry counts against your credit score. A report to showing all accounts in good standing is the goal in working toward repairing 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 Conditions are actually market and economic conditions. With the fall, consolidation, bail out, etc of many large financial institutions, lending guidelines have become tighter. Smaller concerns such as your local banker's mood that day also fall into this group. While we'd like to think your banker is always going to be professional, he's human too. To repair consumer credit, focus on the five Cs: character, capacity, capital, collateral and conditions. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. Fix bad credit! Do your own credit repair without an agency. Visit www.creditrepairsecrets.org for free credit advice. |