It is a subject that few people discuss, but more and more therapists are talking about it – the key link between our emotions and our money. We may think that money is all about our rational selves, but in fact our emotions are often very much invested in our account books.

If we want to repair our credit, we have to deal with the emotional as well as the numerical side of money. There are a few tips that financial experts now believe can help you harness your emotions in a way that can actually help you improve your credit score:

Give Yourself a Break

There is no point in beating yourself up over your credit score – whatever it is. Instead, promise yourself that you will do better in the future and then work to repair your credit rather than working on berating yourself. Taking action to improve your credit rating will improve your outlook as well as your credit.

Don’t make excuses

If you have been the object of identity theft or have genuinely been mistreated by a company, then by all means include an explanatory note in your credit report. However, most lenders do not want to hear a lot of excuses. Whatever your problems have been in the past, you will seem like a much more reliable lender if you focus on what you are doing to get out of problems.

You will feel better and get better responses from lenders if your focus on current action rather than past mistakes. Instead of wallowing in pity and explaining in great detail the personal and financial problems that led to a bad credit rating, give yourself and lenders the condensed version and then move on to a detailed review of what you are doing to repair your credit.

Read the full story

Debt is a major factor in your credit score. If you have too much of it (or none at all) or if you have trouble repaying your debts on time, your credit score will plummet. Keeping your debts reasonable and paid, on the other hand, will do more than almost anything else to improve your credit score. Here are a few tips that can ensure that your debts actually help you boost your credit score:

Consolidate your loans to make repaying them easier

Having lots of loans and debt is one of the biggest reasons leading to poor credit ratings. The larger your debts, the worse your credit rating and the more likely that you will find yourself with large monthly bills that are difficult to repay.

Consolidating your loans means that you take out one large loan to repay all your creditors so that you only have one large loan to repay. While the overall amount of the loan does not change – if you owed $20 000 to five different companies, you will still owe $20 000 but to only one lender – but the interest rates and monthly payments are usually quite smaller and this can help meeting your debt obligations much easier.

Debt consolidation can be an especially good idea if you have lots of high-interest debt and lots of bills that are hard to keep track of. One smaller monthly payment will be easier to remember and will help make bill time less painful.

Pay down your debts by making larger than minimal payments

If you only pay down the minimum amount on each of your loans, it will take you a long, long time to pay down your loans. This is because most lenders only require that you pay down slightly more than the interest amount on your debt each month. Even a debt of a few hundred dollars could take several years to repay this way.

Paying down your debts by putting down more than the minimum required monthly payment can help you pay down your debts faster and so can boost your credit score. Paying down more than you need to also shows lenders that you are in good financial shape and conscientious about your debts – two qualities that definitely make you an attractive credit risk to lenders.

Read the full story

Loans affect your credit score more than almost any other item on your credit report.  The types of loans you have, how long you have had loans, the amounts you owe and your payment history on your loans has one of the biggest impacts on your credit score.  If you can control your loans, you can boost your credit score.  There are a few tips that can get you well on your way to painlessly managing your loans:

Refinance loans

If you got a poor deal on a loan – especially a major loan such as a car or home loan – or if your credit rating has improved since you got your loan, you may want to consider refinancing.  Refinancing means that you take your loan to another lender in order to enjoy better terms or rates.

You don’t want to do this too often – it prevents you from developing long-term relationships with lenders and results in inquiries on your credit report – but if you have good reasons to refinance, it can actually help you repay your debts.  For example, if you can get more reasonable monthly bills that you will actually be able to repay, refinancing can help prevent all those non-payment credit dings that come from not being able to pay your bills.  Making your payments more affordable can save you money and can save your credit score.

In the short term, refinancing can push your credit score down, as you will acquire inquiries on your credit report as you look for a new lender and as you close old accounts and open new accounts.  In the long term, though, refinancing can be a good way of boosting your credit score.  If you are now missing or delaying payments because you cannot afford monthly bills, for example, refinancing a loan or two can be a good way to get back on track and can get you repairing your credit score again.

Look for loans that are offered for bad credit risks

If your credit score is bad but you need a loan, consider services that cater to people with poor credit scores.  These companies know that some creditors with poor credit scores will still make their payments on time and so are willing to speak with debtors other companies would reject out of hand. You may have to deal with higher interest rates, but choosing a bad credit lender can go a long way to ensuring that your credit score won’t disqualify you for a loan.

In the long run, you can always refinance your loan to take advantage of a better rate once your credit score improves.

Read the full story