Five Simple Ways to Improve Your Credit Score after Securing a Logbook Loan

Securing a loan from a bank with bad credit is perhaps the hardest thing that you can ever imagine. Because of poor credit score, most financial institutions will see you as a high-risk party and close your case without even checking any further. However, most logbook loan companies are not interested in your credit score as far as the car is in good condition and demonstrate the capability to repay the loan.

After securing the logbook loan, the focus must shift to building your credit score. Because most of the logbook loans are very risky and come with high-interest rates of up to 400% APR, it is crucial to avoid getting into a similar situation in future. The borrower must start working on improving the credit score immediately. This will make it possible to access credit from banks by the time you are through with the logbook loan. The following are five simple ways to improve your credit score.

Check and correct your credit score with three reference bureaus

The institutions (bureaus) responsible for calculating your credit score are third parties. They have to rely on institutions that deal directly with clients such as banks, mortgage companies, insurance firms, and others that maintain financial records. Because most of these parties are for-profit organizations, submitting your details is rarely on the top of their agendas. Banks concentrate on looking for new clients, building their brands, and raising profits.

In many instances, it is not uncommon to get your credit score misrepresented. Therefore, by getting your credit report with three bureaus, it is easy to point what is missing or misrepresented. If the details of the loan you recently cleared have not been submitted, the credit score would be calculated based on the previous data.  By correcting the details, it is possible to raise the credit score by a significant margin.

Borrow from your own account

Even if banks have declined to lend you, it is still possible to borrow from a personal account. Simply tell the management that you are on a mission to build the credit score, and they will make arrangement to lend you from a personal account. Then, commit to repaying the loan on time and it will be captured as a short loan. All the repayment details will go towards improving your credit score.

Develop a strategy for clearing debts

Now that you have added a new credit, a proper repayment strategy is crucial. It is important to create a plan to cut on costs and start clearing one loan after the other. The best method is starting with the loans that are riskier and most expensive. For example, you can start paying the minimum amounts on all other loans and commit the extra cash to clearing risky credit such as logbook loan.

Pay all your bills on time

While most people think that it is only bank loans that damage credit history, it is important to note that even common bills can pull down the score. From utility bills to credit card bills, you need to settle them on time. You should particularly follow with the credit card company to get a regular report and clear any inconsistencies.

Avoid closing credit cards as a short-term strategy

While the interest rate that accrues from the credit cards is usually very high, a decision to close the card is ill advised. By closing the card, you remove even the good history that helps to improve on your credit score. Indeed, even closing the card will still not work because the bad history will remain. The best thing is reaching the credit card company to draw a repayment plan. You can also set the spending caps to avoid overspending.

 

Tips for dealing with debt collectors effectively.

Once you fail to pay your loan, credit card or utility bills for a long time, a debt collector may be called upon to deal with you. This is especially when you don’t contact or respond to your creditors. Being contacted by a debt collector is an embarrassing prospect for many people that should best be avoided. In such a situation, settle your debt as quickly as possible, since it will only get worse when ignored. However, you need to know how to handle debt collectors effectively to pay off your debt and avoid getting exploited. Here are some tips to do just that.

Know your rights.

Some debt collectors may resort to underhanded methods to get you to clear your debt. It’s therefore prudent to know just what the debt collector can get away with. Under the Law, you are accorded specific rights in the debt collection process, and the debt collector is required to follow certain protocols. For instance, debt collectors should give you at least 30 days of breathing space (no calling or letters) or engage in harassment. Creditors shouldn’t even call you at unreasonable times such as when you’re at work without permission. Knowing these rights will enable you to know when your rights are being abused and take appropriate legal actions.

Record all correspondence.

Don’t delete any voicemails received from the debt collector and keep notes on the phone conversations received. Be sure to note the date and time of the call, the collection agency and the amount stated. The same also goes for any written letters or emails sent to you by the debt collector. Additionally, ensure you request for written confirmation of any agreement made over the phone to act as proof. Maintaining meticulous records will allow you to keep track of the progress yo vu make in your debt repayment, and any foul play on the part of the debt collector can easily be ascertained.

Consider your credit report.

It’s a sad fact that any debt collection will not go away once you clear the debt. The collection will stay on your credit report for years and greatly impact your credit score. To mitigate this effect, ensure the debt in the credit report reads ‘paid in full’ after you pay so loaners may look at it more favourably. You can also have the collection item removed by contacting the collection agency and asking for a ‘pay for delete’ deal. This is where you incur a certain amount of money to have the record of the debt totally cleared from your account.

Say little and stand firm

Once the debt collector calls, try and keep the conversation as short as possible. Such a call is just like an interview. They’re trying to interrogate you and determine a lot of things from it i.e. if you’ve got the capacity to pay. The phone conversation could also be recorded for evidence purposes so try and keep the conversation as short as you can.