My advise to those with poor credit rating or those who want to start cleaning up their Credit Card debts and what to do if your loan applications have been denied due to Credit Reports which states you have Cancelled Credit Cards
1) Settle the smallest amount of credit card loan - only if you cannot settle the one with the biggest amount in full or one time spot payment.
a. you immediately stop the penalties and interest from bleeding for that one card with the smallest amount compared to attending to the biggest amount first while your other cards continue to incur penalties
b. Again, if you can settle the biggest amount one-time or by spot cash payment – settle the one with the biggest amount first.
c. Credit card evaluators or approvers give a bigger percentage for credit track record or credit history first, amount of loan comes next – so best to clean up the smallest first and get a good credit rating for that loan.
2) When you settle your credit cards with banks - Ask for a restructuring package then ask for waivers or rebates or condonations of penalties some banks do give these concessions.
3) Settle one credit card at a time. After you fix and settle one credit card - ask for a Certification of Full Payment or Clearance from the Card Company.
4) When you apply for a new loan, attach the Certification/Clearance from the card company with a letter justifying why you had cancelled cards and prove that your finances have improved now. State a valid and acceptable reason for your past cancelled cards eg. you lost your job, you had to pay for hospital bills, etc. This is important since Underwriters do not get to speak with the loan applicants and it’s only through the letter that you may be able to explain your side.
5) Start building your relationship with your bank by improving the Average Daily Balance (ADB) of your Savings Account now, best if you can have Investment or Time Deposit accounts with them. Once they see that you’ve been banking with them for a long time, and that you maintain a good ADB or placements, its easier for them to approve your loan application.
