Having bad credit can be stressful and annoying. It’s one of the main stumbling blocks to a successful life. Your financial options will diminish, fewer options will be open to you and you will not be able to take advantage of new credit line offers. There are a few steps you can take to start repairing your credit now.
Secured Credit Card
You may be able to get a secured credit card even if your poor credit has prevented you from getting other credit cards. 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.
Be very wary of programs that do not sound legal; chances are they aren’t. Scams abound on the internet that show you how to change your credit file. This tactic is not legal, and you face serious repercussions if you are caught. The legal proceedings will be costly, and you may even be sent to jail.
Learn what affect a debt settlement plan will have on your credit rating before you sign up. Some methods of credit settlement can be a blow to your credit score, so it’s important to check into your options and find one that won’t hurt you in the long term. Many collectors just want to get paid and don’t care about credit consequences.
Take a look at your credit report if you have a bad score. The debt itself may be legitimate, but if you find errors in its metadata (e.g. the date, amount, creditor name), you might be able to get the whole entry deleted.
Don’t spend more than you make each month. You will need to change the way you think about spending money. The rise of consumer credit in the past few years has made it far too easy to buy items without being able to pay, and the bills are coming due. Be honest with yourself about what you can truly afford.
Try not to file for bankruptcy. Bankruptcy will be noted on the credit report for 10 years, afterwards you must rebuild from scratch. It may seem like the right things to do, but your future will be affected. 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.
Pay off your entire balance on your credit card in order to repair your credit. Pay down credit cards that have the highest amount owed, or the highest interest rates. Your debt will not grow as fast as before, if you get rid of high interest rates first, and your creditors will see you are making efforts.
Doing this will ensure that you keep a solid credit score. Every time you pay late it is put on your credit report and will hurt you if you ever need a loan taken out.
Make sure that the credit score repair agency you choose to work with is reputable. There are far too many of these companies that are quite simply fraudulent. There are many people who have been the victim of a credit score improvement scam. Always read reviews online first to find a good agency.
Keep your credit cards in your wallet. Using cash will ensure that you stick to your budget and don’t overspend. When you find credit card spending unavoidable, pay down your balance immediately.
Dealing with a debt collection agency is one of the most traumatic parts of a financial crisis. Remember that when dealing with harassing collection agencies, consumers have the option to issue a cease and desist letter to stop the harassment. While such letters stop collection agencies from calling, the consumer is still obligated to pay the debts being disputed.
If you need to rebuild your credit, you need to start establishing a history of responsible borrowing. Prepaid credit cards help you re-establish credit without the risk of falling into an even deeper hole due to delinquent payments. Doing this shows lenders that you can be trusted with credit.
Be aware that threats made by a bill collector are illegal. You need to know what the laws are that protect your rights as a consumer.
A very big portion of your credit score is your ability to pay your bills before they become late. Establishing payment reminders is a great way to ensure you will make your payments on time. You can set up reminders in many ways. Set up your online account so that an email is sent to you or have your debtor text you a reminder.
A debt repayment plan is an essential step towards repairing a bad or low credit score. It can be difficult to have existing debt as it hurts your credit score. Create a budget that you can live with, and use as much available money as possible to pay down your debt. When you don’t have outstanding debt, your credit rating will rise.
Carefully go over your credit report to check for discrepancies that might be invalid. Your score might be influenced by mistakes or cases of identity theft. If you can prove that a given discrepancy is invalid, file a credit dispute and the offending mark will get removed after a while.
Having read these simple tips, the only thing left now is to apply them. Having a solid credit score can impact many important purchases that you make, so taking time from your busy schedule to read up on this subject is always a good idea.