If you knew how much you owed and who you owed it to, you may have been able to avoided bad debt entirely. Now you must handle the crisis and fix your credit score. You can repair your credit rating by following some of the great advice found in this article.
Credit Card
Look at the credit card accounts you have with a balance over 50% of the credit limit. Pay those off until they fall under this number. 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.
You can receive a better interest rate if you have excellent credit. You’ll be able to make your payments more easily and get your debt paid off quickly. Asking for a better deal from your debtors can help you get out of debt and back to achieving a better credit score.
If your credit is good, it’s easy to get a mortgage on a new home. Making mortgage payments in a timely manner helps raise your credit score even more. When you own your own home it shows that you have assets and financial stability. These benefits will pay off if you need to secure a loan.
Interest Rates
If you want to avoid paying a lot, you can pay off debts that have a huge interest rate. Creditors are skirting aspects of the law when they hit you with high interest rates. Although, in reality, you did agree in advance to pay any interest charges incurred. If you’re going to try taking your creditors to court, make sure you can prove the interest rates they charged were excessively high.
Work closely with all of your creditors if you are aiming towards repairing your credit. This will help you stabilize your situation and start working towards a better financial situation. You can even ask for help, such as pushing back the due date of your monthly payments or reducing the interest rate.
Before using a credit counselor, it’s important to research them completely. While some counselors are legitimate, offering genuinely helpful services, others have ulterior motives. Other counselors are nothing more than scam artists. A savvy consumer will always do his or her research on any credit counseling service to ensure that the agency is legitimate.
Do not try something that you do not know is legal or illegal. As we speak, people are trying to take advantage of illegal practices to have people create credit files that can get them into trouble. This tactic is not legal, and you face serious repercussions if you are caught. They may seem like a small matter, but if you get caught, you could receive heavy fines and even jail time.
Debt Settlement
Before you agree to enter a debt settlement, learn about what happens to your credit as a result of it. Research all of your options, make an informed decision about the method you chose, and only then should you agree to the settlement. Some debt settlement companies are only after profits and do not communicate the likely consequences of their methods.
Dispute any errors that are on your credit report so they are removed. Draft a dispute letter that will go to each credit rating agency that shows an error, and prepare any supporting documents. Mail the materials and ask the postal service for proof of delivery in order to build a record to show that the agency did indeed get the letter.
Bankruptcy should be filed only if absolutely necessary. This negative mark will stay on your report for 10 years. You may think that bankruptcy is your only option to rid yourself from debt, however look at your long term financial goals before deciding to file for it. If you have filed for bankruptcy in the past, it can be near impossible to obtain a loan.
You need to read and understand the credit card statements you receive in the mail. It’s up to you to ensure that the charges on your bill are correct and that you haven’t been double charged, overcharged or charged for something you didn’t buy. It’s up to you to make sure that every item on your bill is correct and dispute those that are not.
Credit Score
Lowering the balances you carry on revolving accounts can improve your credit score. You could increase your credit score just by paying down some balances. When your available credit passes 20, 40, 60, 80 or 100 percent, it gets noticed by the FICO system.
If you are having a lot of trouble with your credit, consider locking up your credit cards for a while. Use cash for purchases instead while you are building back your credit. If the purchase you’re buying is more than you can currently afford you can use a credit card, but pay it back as soon as possible.
An instant solution to your problems is usually too good to be true, especially when that solution is some kind of “magic” debt relief being offered by a lawyer. Due to the large number of people experiencing credit difficulties, predatory lawyers have sprung up who charge big fees for credit restoration services that are either useless or illegal. Get reviews on a lawyer before you go to them for help.
You should have noticed that the preceding tips have a common theme–they are mostly based on common sense. By following the information here, you will be able to finally get your credit repaired.
