Knowing what you owed and to whom it was owed may have prevented you from incurring the debt in the first place. It’s now time to buckle down and fix your credit. The following advice is easy to put into practice, so read it and then put it to use.
If your credit card has a balance of over 50% of your limit, it should be your number one priority to pay it off until the balance is under 50%. 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.
The higher your credit score, the lower the interest rate that you can obtain will be. By lowering your monthly payments, you’ll be able to reduce your debt more quickly. Compare offers and choose the best interest rate you can find when borrowing money or subscribing to a credit card.
Interest Rates
If your creditors try to jack up your interest rates, do not pay them. There are laws that protect you from creditors that charge exorbitant interest rates. You did sign a contract saying that you would pay off the debt. You need to be able to prove the interest rates are too high if you want to sue your lenders.
Make sure you check out any credit counseling agency you consider using. While there are lots of counselors with your best interest at heart, there are others who just want your money. Some are not legitimate. Wise consumers always verify that credit counselors are legitimate before dealing with them.
Contact your creditors to request a reduction in your credit line. It will pay off in lowering the risk of excessive borrowing and reflecting good financial decision making on your behalf.
Credit Unions
Credit unions are an option for those who have run out of options. Credit unions can often offer better rates and more alternatives than larger banks, because they base their decisions on the local economy instead of the national situation.
Take a look at credit card bills to make sure that every item is one you have charged. You must get in touch with your credit card issuer as soon as you spot an error to make sure that it is properly handled and does not result in any negative reporting.
If you and a creditor agree on a payment plan, make sure the agreement is committed to paper. You want documentation to back yourself up so there will be no problems in the future, and if the company owner changes you will have more of a chance of keeping your plan. When you pay it off, send a written copy of proof of payment to all three credit reporting agencies.
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. The state of the economy has caused many lawyers to practice unethical methods by promising credit improvement for a steep fee and not delivering. Prior to contacting any lawyer for help fixing your credit, investigate him or her thoroughly.
It goes without saying that if your credit is poor and needs repairing, you need to start from the bottom and build. Prepaid credit cards can help you demonstrate responsible use of credit without having to worry about missing payments or late fees. Potential lenders will see this as a positive thing as it will show you are a responsible person.
Determine a way that you can settle all overdue accounts using affordable time payments. These will show on your report but you will have a better standing than you did before.
It is illegal for debt collectors or companies to threaten you. If this happens, be sure to document it. There are consumer laws which limit the things that a collection agency can do to you.
Credit Counseling
If you are having a hard time sticking to your budget, contact a credit counseling agency for help. Often times, these companies will work with the creditors to get negotiate a lower interest rate and an affordable payment plan that will help get your finances back on track. Credit counseling helps you learn how to best manage your finances and meet your obligations.
A very big portion of your credit score is your ability to pay your bills before they become late. Make use of payment reminders to help you remember to make your payments on time. There are a variety of ways to setup payment reminders. You can establish them through your online banking account, where reminders will be sent to you through email, or you can have debtors send a text to you reminding you there is a payment due.
If you are serious about wanting to fix your credit, you need to establish a plan to begin paying down your debt. Any current debt you have will lower your credit score, so you need to work to get rid of it. Create a budget that you can live with and devote as much of the rest to paying off debts, starting with the ones with the highest interest rate first. The absence of current debt helps improve your credit score.
As you can plainly see here in this article, getting out of debt and repairing your credit score is more about common sense than you may have realized. If you follow this information, you can get to the ultimate goal.
