Developing a low credit score is easy to do, but difficult to remedy, leading to financial barriers that are hard to surmount. It can limit your financial choices and keep you from taking part in good opportunities. Yet, some simple steps can fix your credit and help you to keep your credit in good standing.
Higher Balances
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. Credit card balances are among the factors taken into account when determining your credit score. Maintaining balances over 50% will lower your rating. You can attain lower your balances by using balance transfers to move debt from accounts with higher balances to those with lower balances, or by simply paying off some of your higher balances.
Opening up an installment account will help you get a better credit score and make it easier for you to live. There is a minimum amount each month that you will have to pay, so be sure not to get in over your head. You can improve your credit rating quicker using this type of account.
It’s vital that you actually begin paying the bills that you have if you want to improve your credit. Not only must bills be paid, but they must also be paid in full and in a timely manner. Once you start paying your past bills off, you will notice an immediate improvement in your credit.
Before you hire a credit counselor, make sure that you have done your research. Although some can be quite legitimate, others have motives that are less than kind. Other options are clearly scams. You should research any counseling service you are considering prior to initiating communications with them.
Contact your creditors to request a reduction in your credit line. This is likely to keep you from overusing credit, which can be a financial burden. It also lets credit card companies know that you are responsible, and this makes them more likely to extend credit to you as time goes on.
Credit Score
Prior to agreeing to a debt settlement agreement, find out how that process is going to impact your credit score. Some ways of dealing with debt repayment are better for your credit score than others, so make sure you are achieving the best outcome for you before you sign anything. Creditors are only trying to get the money that you owe them and could care less how that hurts your credit score.
If getting a new line of credit is vital to your credit improvement efforts, look into joining a credit union. You may find that the credit union has more options and better rates to offer you than banks will.
If you see errors on your credit reports, dispute them with the credit agency. Compose a letter of dispute to every agency that reported errors, and include as much documentation as you can. Make sure that you send the letter via recorded delivery, so that you can prove that the credit agency receives it.
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. You can pay down one credit card in full, rather than chipping away at many.
Many times you and your creditor can work together to come up with a prepayment plan. If so, be sure you get a written agreement stating the terms. Having documentation is important for your records but also protects you in case a creditor changes their mind. After you have paid your debt, request appropriate documentation that confirms your zero balance.
Begin the process of credit improvement by trying to pay down your credit card balances as fast as you can. Start by paying the cards or accounts with the highest interest rates. This will show creditors that you are responsible with the cards.
If you apply these tips, you should be able to improve your credit and maintain a good score. A good credit score is essential to financial freedom, take the time to learn about fixing your credit.
