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Repair Your Bad Credit Score

Updated on September 15, 2010

Repair Your Bad Credit

There are many ways you can repair your bad credit. Understanding credit scores is a complicated process but the easiest way to make your credit score go up is to pay all your bills on time.   Remember, the higher your credit score, the better your chances are at qualifying for credit cards with introductory APRs of 0% for 1 year such as the Chase Freedom credit card or the American Express Blue credit card. These shiny credit card offers are available only to those with a good credit score of 700 or above.

The easiest way to repair your credit score is to qualify for guranteed loan services that are feasible without draining your checking account. Most ways involve you to pay a fee as little as $20 with some higher than $100. But there's a catch and these services are available only for people with bad credit, they have been with the same employer for at least 2 years, they have a checking account with direct deposit, and they earn a minimum of $800 each month.

There are many short term loan lenders out there, think of it as payday loans, and these services are quick. You can qualify for a loan of $300 with a bad credit score of 250 if you bring home at least $800 a month. Payday loans or lenders with the logo "get-cash-fast", are not your best choices because these guys normally charge you double for what you borrowed. Say you borrowed $300. Your final payment will be $600 and some lenders can be evil and tack on an interest rate to that $600.  

Online lenders are the way to go! Many online short term loan lenders, like Money Mutual, are able to deposit funds into your checking account within 24 hours or the next business day. You will need to call your bank and check if they posted your loan funds to your account. Many online short term loan lenders also don't add on interest rates or charge you double but use a paydown system instead. Say you borrowed $300, your fee charge will be $90, so the total amount you payback will be $390 if you pay off the loan in full before your first payment is due. If you don't pay off your loan in full, then you approve your lender to use the "paydown" system.

For every $50 dollars applied to pay down your loan, $15 dollars will be subtracted from the $90 dollar fee. If you pay $50 for your first month, in your second month, you new balance will be $250 for the loan but your fee charge will be reduced to $75. So now you owe $250 plus $75. Another $50 to paydown your loan in the third month, then for the fourth month you will owe $200 plus $60. So its good to paydown your entire short term loan in full before the first due date.

Applying for these guaranteed short term loans is a good way to raise your credit score and get cash in your checking account very fast. Yes you may lose money in the fees but once you get your score up to 700, you can apply for credit card offers that has cash back rewards and 0% introductory APRs. Always ask question first before you give your approval for anything and if you're dealing with an online short term loan lender, ask them to email you a diagram of their paydown system so you know how much you will owe. A $90 one-time fee is better than a 6-month $250 fee. Online short term lenders is way better than those Payday Loan lenders you see on the side of the road.




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