Consumer Credit Repair: 5 C’s Of Good Credit
October 22, 2009 by Tiffani G Peterson
Filed under Bad Credit
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
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.
Credit cards especially report 30, 60 and 90 day delinquencies to the credit reporting agencies. Each negative entry counts against your credit score. If it’s not already there, you’ll want your report to show all accounts in good standing to repair your 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
Your net worth is what’s meant by capital. Someone with all debt and no assets isn’t usually a good prospect for lenders. You’ve probably heard that they typically lend money to people who don’t need it. That makes sense from a lending standpoint. If someone has shown they can build up assets with debt, you’d be happy to give them more.
Collateral
Collateral is something to secure the debt. Typically, loans are secured by property such as real estate or vehicles. If there’s something to get back should you default on the loan, there’s less risk to the lender.
Conditions
The conditions are market and economic conditions outside your control. With the recent economic recession, lending guidelines have become more strict.
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.
Character, capacity, capital, collateral and conditions are the five areas to focus on when you’re looking to repair consumer credit.
Find out how to do your own credit repair without an agency. Visit www.creditrepairsecrets.org for free credit repair secrets.
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