There are many downfalls to having bad credit, including preventing you from getting a loan approval, or leasing a car. If you ignore bills and pay fees late, your credit score will suffer. If you have a credit score below 650, you need to read this article right away.
Credit Card
If you can’t get a normal card due to low credit score, look into a secured card. Secured credit card applications have a high rate of approval because you must fund a security deposit against your credit limit. Responsible use of a credit card can help rebuild your credit.
Getting an installment account can help you earn money and provide a boost to your credit. You are required to meet a monthly minimum, so be sure that you can make the payments. You can improve your credit rating quicker using this type of account.
Do not fall for the false claims many have about their ability to fix your credit. The claim that they can remove accurate debts from your credit report is false. You have to wait for seven years before negative data can come off your record. If there is incorrect, negative information, you can get it removed.
If an action can result in imprisonment, draw the line. There are scams all over the web that teach you how to create a new credit file. This tactic is not legal, and you face serious repercussions if you are caught. You could go to jail if you have a lot of legal issues.
Debt Settlement
Before you agree to enter a debt settlement, learn about what happens to your credit as a result of it. Some settlement agreements can actually be bad for your credit score, so be wary and do your homework. Some debt settlement companies are only after profits and do not communicate the likely consequences of their methods.
If you find a mistake on your credit report, be sure to dispute it! Draft a dispute letter that will go to each credit rating agency that shows an error, and prepare any supporting documents. Ask for a return receipt so that you can prove that the agency got your package.
Get a written copy of any payment plan you negotiate with a creditor. This is the only way that you have of protecting yourself. As soon as you get it paid off, have that in writing so you are able to inform the credit reporting agencies.
Do everything you can to avoid filing bankruptcy. Filing bankruptcy negative effects your credit score for 10 years. While ridding yourself of most debt may seem ideal, it is not without consequences. It may be hard to get a credit card or a loan if you declare bankruptcy.
To show that you are serious about improving your credit, start systematically lowering all of your account balances. Pay down your cards that have the highest interest and largest balances first. This will show future creditors that you take your debts seriously.
Timely payments will keep your credit status in good standing. Each time you make your payment late it will go against you.
Take the time to carefully go over your monthly credit card statement. Really analyze the purchases on your card to make sure you are not receiving any errant charges for items you never purchased. You must be accountable for each item on your statement.
lenders will not read these statements when looking at your credit report. It may even draw more attention to the blemish.
Try to avoid using credit cards. Using cash will ensure that you stick to your budget and don’t overspend. If you absolutely need to use a credit card, be prepared to pay off the balance at the end of the month or as soon as possible.
Collection Agency
When you are having trouble paying your bills, debt collection agencies will start contacting you demanding payment. You can get a collection agency to cease and desist from harassing you but this does not discharge the debt. You may be able to stop the deluge of calls from a collection agency, but the debt must still be dealt with.
Repairing your credit isn’t something you can do overnight, but the best way to fix it is to slowly raise it back up. Because it does not carry the risk of late payments that would hurt your credit score, getting a credit card that is prepaid will give you a very safe way to employ credit. You want to demonstrate your credit worthiness and responsibility to potential lenders.
If you are having a difficult time creating or sticking to a budget, get in touch with a responsible credit counseling organization. Often, these organizations can work with your creditors to work out an appropriate repayment plan and can help you focus on improving your finances over time. Consumer credit counseling services can provide you with effective ways to better manage your money and pay off debt.
Any person who needs a loan or line of credit to make home repairs, start a business or send their kids to college will need to have a good credit score. These tips can help if you are experiencing debt and do not have the greatest credit score.
