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Consumer Credit Repair: What They're Looking For

Consumer Credit Repair: What They're Looking For


    

Consumer Credit Repair: What They're Looking For

by Tiffani G Peterson

To figure out how to do consumer credit repair, there are five areas lenders look at. They all start with C: character, capacity, capital, collateral and conditions.

Character

Character refers to how well lenders can trust you. If they know you personally, that's great. Oftentimes, this is determined by how well you've made payments on time.

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 the ability to make the payments. It's essentially your cash flow. If your expenses are close to your total income, they won't want to lend you more money because you won't be able to pay it back.

Capital

Capital is your net worth. Even if you're making plenty of money each month, if you have way more debt than you have assets, you're a bigger lending risk. Having more assets shows you're worthy of more credit.

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.

When you're looking to repair consumer credit, remember the five Cs: character, capacity, capital, collateral and conditions.

About the Author:
Fix bad credit! Do your own credit history repair without an agency. Visit www.creditrepairsecrets.org for free help.


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