Many people find themselves having to deal with bad credit due to the downturn of the economy, the rise of the cost of living, as well as the increase in layoffs. Luckily, these tricks and tips can show you how to have a better credit score.
Credit Card
Try to get a secured credit card if you are not eligible for an unsecured card. This will help you fix your credit. With a secured card, you have to fund your account before you use the card so that the bank will be assured that you will pay off your debts. If you utilize a credit card responsibly, it can aid in the repair of your credit rating.
Start by paying off credit cards with accounts 50% over your limit. You can concentrate on another card once these accounts are lowered to under half of your limit. When balances are over 50%, your credit rating goes down significantly, so try to either spread out your debt or, ideally, pay off your credit cards.
Your interest rate will be lower if you have a good credit score. Lower interest rates will reduce the amount of your monthly payment, and can also make it easier to repay your debt faster. Receiving competitive credit rates and good offers are important in having credit that you can pay off easily, and that will get you a great credit score.
A good credit report means you are more likely to get financing for a home. If you pay your mortgage as agreed, your credit score will rocket into the stratosphere. Owning a home gives you secure financial assets. These benefits will pay off if you need to secure a loan.
Interest Rates
You can lower your debt by refusing to acknowledge the part of your debt that has been accrued by significantly high interest rates. It is important to know the terms of your original agreement for the debt you incurred. Usually if you agreed to the terms the terms will be upheld as legal. If you believe the charges are excessive and your debtor will not negotiate down the interest and other additional charges, state laws might provide you with additional avenues to pursue a reduction in these charges. Federal law provides that when you are billed by a collection company the fees and interest cannot exceed the amount of the original debt. Remember you agreed to pay any interest that accrued over the life of the account. It is likely you can have exorbitant interest rates reduced if you sue the creditor.
Any company or credit counselor that claims they can erase all negative reports from your credit history should be viewed with some skepticism. All information remains on your credit report for a period of seven years or more. It is possible, however, to remove errant information.
Credit score improvement requires that you begin paying your bills. Pay these bills on time, and make sure you pay the full amounts owed. You will notice how quickly your credit score increases when you start paying off those overdue bills.
You need to carefully scrutinize credit counselors before you consult them for help with repairing your credit. Many counselors are honest and helpful, but others may be less interested in actually helping you. Other options are clearly scams. Smart consumers will always check to see that credit counseling agencies are, in fact, legitimate before working with them.
Start living within your means. This might be a tough thing to get your head around. In past years, people used good credit ratings to buy the items that they normally couldn’t afford, and they are now currently paying big payments. Be sure to assess your finances and find out the things that you can afford.
The first step in credit repair is to close all but one of your credit accounts as soon as possible. Try to make a payment or transfer your balance to your open credit account. You will be able to pay one bill instead of a plethora of small ones.
Take a look at credit card bills to make sure that every item is one you have charged. Should there be any mistakes, contact the company and talk to them to avoid being reported to the credit companies.
Many times you and your creditor can work together to come up with a prepayment plan. If so, be sure you get a written agreement stating the terms. This provides you with documentation that an agreement is in place in case the company changes hands or the creditor tries to change the terms of the agreement. Once it is paid off, you should get that in writing to send to the credit reporting agencies.
Do not file for bankruptcy if you do not have to. It can adversely affect your credit for up to 10 years. Though it may seem necessary at the time, you should weigh the costs over the next ten years before you decide to go through with the filing. It may be impossible for you to get a loan or credit card in the future if you file for bankruptcy.
Now that you know how to improve your credit score, why wait? You should take action before your credit gets worst, at least to slow down the process.
