This collection of basic information helps creditors to decide whether they approve a credit request or not. The worst are bankruptcies, CCJs and late payments, so everyone should be careful with these things, because they can cause bad credit score. The situation is not that desperate, people can repair their credit score!

The first step is to find out a person’s credit score. This is possible if the person sends a letter containing information about him to credit bureaus. The required information is the following: full name, DOB, current address and previous addresses for the past five or six years and the person’s signature. Some credit bureaus require a self-addressed envelope; they will send the credit history in that envelope. After the person has got his credit history, he can think about credit repair solutions. Many financial companies can help anyone who has credit problems, and their solutions are the following.

The first and easiest solution is joining a debt management plan. If the debtor wants to become debt-free, a debt management plan can help him to become debt free in a short period of time, and he does not have to repay the total amount of his credit, a part of it will be written off when he finishes the debt management plan. This can be done either with professional help, or the person can do it by himself, but in this last case he has to be well-prepared if he wants to succeed in negotiating with his creditors. Completing a debt management plan and repaying the debts help to get a better credit score.

Another good option for repairing credit is an Individual Voluntary Agreement. By signing an IVA and sticking to the repayment plan, a person can get a better credit score in about three years. Since the IVA is a legally binding document, the person will not have to deal with the creditors himself; an Insolvency Practitioner will do this for him. In most of the cases creditors will accept the agreement, and the debtor will become debt-free when the repayment is completed. An IVA is a very good option to repair credit, because it provides affordable monthly payments, and when the agreement is completed, the person will have a much better credit score than before.

There are solutions for people who have more serious debt problems, and are considering filing for bankruptcy. A bankruptcy lowers a person’s credit score, so if it is possible, people should avoid filing for bankruptcy, especially when they have several other options, which do not lower their credit score as much. These options would be a consolidation loan, a home equity loan, getting help from a credit counseling company, an IVA or even personal negotiation with the creditors. All these are good solutions to bankruptcy, and they do not lower people’s credit score too much. Actually, after the completion of an IVA or another debt management plan, the person’s credit score will become higher because he will be debt free.

To make sure the person’s credit score is recalculated; he should send the copies of his documents to the credit bureau and ask for his credit score. To make sure his credit score is updated, he should send a copy of his completed IVA, debt management plan, or whatever option he chose. People can compare their credit score before and after credit repair, and they will surely notice the difference. As soon as their credit score is updated, they will be able to get another credit because their credit history is repaired.