You need not suffer the effects of bad credit, no matter how you wound up with credit problems. Whether you have been personally damaged by economic conditions, victimized by dishonest lenders or even were simply too carefree in your spending, you deserve better credit. Fortunately, there are quite a few ways that you can remedy your credit situation.
The first step in credit restoration is to build a plan. You need to change your past habits and build new, better approaches to credit. Sticking to necessities for a while is crucial. If you are buying something because you want it, and don’t need it, put it back on the shelf.
If you have credit cards with a balance that exceeds 50% of your credit limit, you must continue to pay on them until the balance is lower than 50% of the credit limit. Any balances that are over half your limit drag your credit rating down. So be sure to pay your credit card down or, if you can not, try to use another credit card.
Avoid paying off high interest rates so that you don’t pay too much. Creditors trying to charge more from you than what they originally loaned you plus a reasonable amount of interest are usually willing to negotiate. However, when you signed up for the line of credit you also agreed to pay the interest. If you go ahead and sue your creditors, ask that they consider the high rate of interest.
An important tip to consider when working to repair your credit is to work closely with your credit card companies. If you do this you’ll find that your debt doesn’t increase and your credit is improved. You can even ask for help, such as pushing back the due date of your monthly payments or reducing the interest rate.
Never hire a credit counseling company without doing some research, so as to ensure they are a reputable organization. There are some legit counselors, and there are some that have ulterior motives. Other programs, while they sound good, are complete and total scams. If you’re smart, you’ll make sure the credit counselor is not a phony first.
Be very wary of programs that do not sound legal; chances are they aren’t. There are scams all over the web that teach you how to create a new credit file. It’s illegal to do this and you can get caught easily. The end result of getting caught during the crime could be expensive legal fees and a possibility of time behind bars.
Close all your credit cards except for one as a means of repairing your credit. You should arrange to make payments or make a balance transfer to your open account. This can help you avoid paying down smaller balances and focus on paying one card off.
Do everything possible to avoid bankruptcy. It can adversely affect your credit for up to 10 years. Though it may seem necessary at the time, you should weigh the costs over the next ten years before you decide to go through with the filing. Once you have filed for bankruptcy, it may become very difficult to secure a loan or open a new credit account.
Credit Cards
When you start fixing your credit, pay down balances on the credit cards as soon as you can. Pay down credit cards that have the highest amount owed, or the highest interest rates. This shows creditors you are responsible about your credit cards.
These are ways of protecting your credit rating. Credit card companies are one of the few businesses that report on a regular basis. Paying late can severely hurt your credit score.
When you receive your credit card statement, go over it carefully. Always check to make sure that you are being charged correctly, and not being double charged or charged for items that you did not buy. You bear the responsibility for looking after your own best interests, and you are the only person who will know if your statement is accurate.
Credit Score
Lowering the balances on any currently revolving accounts will increase your credit score. Your credit score can be raised if you lower your balances. When balances reach anywhere from 20-100% of your available credit balances (in 20% intervals), the FICO system will make a note.
Debt collectors hounding you can be very stressful. You have the option of sending a cease and desist letter to agencies to stop them from calling, but that doesn’t mean that your debt vanishes. A letter like this may stop a collection agency from harassing you, but you are still on the hook to pay your debts.
If you need to rebuild your credit, you need to start establishing a history of responsible borrowing. Prepaid credit cards offer you the ability to build credit while not having to worry about late payments or penalties. This helps prove to lenders that you’re credit worthy and responsible.
Make a definite plan to pay past due and collection accounts. While these items will still appear on your report, you will no longer be penalized by having so much unpaid debt.
Pay down your debt. Creditors will look at your debt to income ratio. You will be seen as a greater credit risk if your debt is too high in comparison with your income. Most people can not immediately pay off debt, so it is best to make a plan and stick to it.
If you are determined and ready to learn, you can fix your credit in no time. Apply the advice from this article to start your march toward better credit score days.
