It can be stressful to deal with having a bad credit score. It is especially frustrating when you are haunted by bad decisions from your past. Rebuilding a good credit score is an uphill climb, but the trail does exist. Here are some great ideas to get you back on track.
If you are unable to get an unsecured credit card due to your low credit rating, consider a secured card to help reestablish your rating. Secured credit card applications have a high rate of approval because you must fund a security deposit against your credit limit. Using this new credit card in a responsible manner will help to build back up your good credit rating.
Available Credit
Try to keep a balance of less than 50% of your available credit on all of your cards. Your credit score can be negatively impacted if you are carrying a large balance compared to the available credit you have. While you are paying off these cards, reduce the balance to a small percentage of your available limit.
You won’t be able to repair your credit until you are able to pay those bills. You should always make an effort to pay your bills on time and in full. Once you have started to pay towards your past-due accounts, you credit score will gradually improve.
Before you hire a credit counselor, make sure that you have done your research. You will find some counselors that truly want to help you fix your credit situation, while others may have different motives. Other programs, while they sound good, are complete and total scams. To help protect yourself from fraud, investigate any credit counselors. One way to check an agency out is to check with the Better Business Bureau.
Check any negative items on your reports carefully when you begin fixing your credit. The item may be essentially correct, but there may be an error someplace. If the date or amount, or some other thing is incorrect it may be possible to get the entire item removed.
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. Always send your dispute letters certified mail, so that you can get return confirmation. This will give you proof that the agency received your dispute paperwork.
Avoid spending more money than you make. You will need to change the way you think. In years past, many people relied on credit cards to make major purchases, but now those risky financial choices are catching up with them. Take a hard honest look at your budget, and figure out what you can honestly afford to spend.
Always examine your monthly credit card bill to make sure everything is accurate. If this is the case, you need to call the company right away to avoid them from reporting it to credit reporting agencies.
If you and a creditor agree on a payment plan, make sure the agreement is committed to paper. 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. If you have finished paying it off, you should request a confirmation so you can send it to the credit reporting agencies.
Do everything you can to avoid filing bankruptcy. This negative mark will stay on your report for 10 years. Though the idea of ridding yourself of debt can sound appealing, the long term consequences just aren’t worth it. If you do file for bankruptcy, it will be extremely difficult to get approved for a loan or a credit card for many years, if ever.
You have a long way to go to get the credit score you want from the advice you got here. Most importantly, be consistent, making sure to pay your bills on time. It is time to put some time and efforts into this project. Keep in mind that you will be rewarded.
