So many people have poor credit these days because of the bad economy, lay offs, and increased cost of everyday living expenses. Luckily the tips provided here are useful ways to get your credit score looking healthy once again.
If credit restoration is your goal, create a plan and stick with it. Make a commitment to making better financial decisions. Stick to the essentials, and avoid frivolous purchases at all costs. You should only make a purchase if it is necessary and it fits in your budget.
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. If your credit card balances exceed 50% of their limits, it will lower your credit score, so spread your debt over multiple cards, or better, pay down the balances.
Interest Rates
Excessive interest rates can be contested. However, it is best not to sign contracts containing them in the first place. When a creditor hits you with incredibly high interest rates, you may have a case for negotiating to a lower amount. On the other hand, you’re likely bound by a contractual agreement to pay any interest charged by lenders. Be very wary of suing your creditors, especially if all of your issues were covered in the contract.
Do not do anything that will make you end up in jail. There are plenty of credit scams that purport to erase your existing credit file and create a new one. Needless to say, this is against the law and you are likely to get caught. Penalties can include large fines and possibly even incarceration.
Start living within your means. You may have to overhaul your entire mindset when it comes to money. In years past, many people relied on credit cards to make major purchases, but now those risky financial choices are catching up with them. Be realistic about the lifestyle your income affords you.
It will be easier to increase your credit rating if you only have one open credit card account. You can transfer all of your balances to one credit card, ensuring you choose the one with the lowest interest rate. By doing this, you can work towards completely paying off one credit card with a large debt, rather than working piecemeal with many smaller debts.
It is important to get any payment plan that you agreed to with a creditor in writing. This will give you important documentation in case of an ownership change or if the creditor tries to back out of the agreement. After you have paid your debt, request appropriate documentation that confirms your zero balance.
Do not file for bankruptcy. Bankruptcy can make getting credit almost impossible for many 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.
Credit Cards
In order to start repairing your credit, you should try to pay down the balances on your credit cards as quickly as possible. No matter what the balances are on your credit cards, pay down the highest interest rate cards first. This can prove to creditors that you are serious about paying down your debt.
Look for a credit score improvement company that has good reviews online and is legitimate. Just like any other field, credit restoration has plenty of companies that do not provide what they promise. Many people fall victim to these scams every day. You need to research customer feedback so you can determine if a company is trustworthy or not.
Statements like these will only be ignored, so it’s not worth the trouble. The basic reason for bad marks on credit is simple. You did not pay something you were supposed to pay. Lenders are often discouraged by people that make excuses for bad credit.
Credit Card
Credit card usage should be eliminated. Use cash to pay for things whenever possible. When you do use a credit card, pay off the balance in full each month.
Repairing your credit isn’t something you can do overnight, but the best way to fix it is to slowly raise it back up. Prepaid credit cards offer you the ability to build credit while not having to worry about late payments or penalties. Potential lenders will see this as a positive thing as it will show you are a responsible person.
Now that we have gone over the different ways you can go about repairing credit, why not get started now? Don’t let poor credit affect your life any longer. Use the tips presented here to repair you score and your overall financial health.
