Many people’s credit scores have suffered as a result of the economic downturn. The following tips are presented to help you improve your credit score and help you be more disciplined with your money.
Secured Credit Card
If your credit history has put you in the position where you are not able to obtain a regular credit card, you should try to get a secured credit card to begin rebuilding your credit. When you open a secured credit card account, you place money on deposit to cover any charges you may make. This ensures in advance that you will have enough money to pay for your debt. Using this new credit card in a responsible manner will help to build back up your good credit rating.
Opening up an installment account will help you get a better credit score and make it easier for you to live. With this sort of an account, you need to keep a minimum. Your FICO score will rise over time, if you responsibly manage this type of account.
Credit Counselors
Always do research before contracting a credit counselor. Some credit counselors offer real help while others have more dubious things in mind. Other options are clearly scams. A wise consumer will find out if the credit counselors they deal with are legitimate or not.
Be wary of credit score repair scams that can get you in legal trouble. There are various online scams that involve creating a fresh credit file. Doing this is illegal, and you will be caught. In addition to the possibility of facing jail time, you could be fined, your attorney bills may be substantial, and your reputation could be ruined.
Requesting that your credit card limits be lowered can benefit you. Doing this keeps you from overtaxing yourself. It also shows the lending company that you are responsible.
Read your negative reports carefully when attempting to rebuild your credit. While the credit item itself may not be in error, if you can find a mistake in the date, amount, or any other factor, you may be able to have the whole item removed from your report.
Try joining a credit score if you’re still struggling to boost your credit rating by opening new lines of credit. Credit unions have opportunities that are better than other places and are usually local.
Find and challenge errors on your credit report using the dispute process offered by each credit reporting agency. You should contact the credit bureaus both online and by certified letter; be sure to include proof of your claims. Ask for a return receipt so that you can prove that the agency got your package.
Try to pay down all of your debts until you’re only carrying a balance on one. You may be able to transfer balances to your remaining account. By doing this you can make your bills more manageable. Instead of a mailbox full of credit card bills, you will only have one.
Any time you establish any payment plan with any creditor, make sure you get it in writing. You need to have a contract in writing so if the creditor goes belly up or they change your terms, you can catch them on it. Once you make the final payment, get a statement that verifies that the debt has been satisfied and send it to the various credit reporting agencies.
To accomplish getting a better rating on your credit, pay down the balances of your current accounts. Your credit score can be raised just by reducing your balances. The FICO system notes when balances are at 100, 80, 60, 40 and 20 percent of your total credit available.
If you have a lot of debt that you cannot pay, it can create a mess. Try to make sure that you find a little bit of money in your budget for all the creditors you owe payments to. Minimum payments will keep your debt accounts in good standing, and will keep them from ending up in collections.
It goes without saying that if your credit is poor and needs repairing, you need to start from the bottom and build. Prepaid credit cards are great for this, since you can get improved with a bad credit score, and there’s no way to rack up debt and late fees. This will help you prove to lenders that you can be responsible, and are credit worthy
Create a plan to settle all of your unpaid and past-due accounts. Your debt will show up as paid once you have taken care of it.
There is no reason to put off starting to repair your credit now that you’ve learned how to do so. You should take action before your credit gets worst, at least to slow down the process.
