Having poor credit can be a serious hindrance to moving forward with your life. It can cause you to miss some great opportunities and take away some financial options. You can repair it though, and make steps to prevent it from spiraling down further.
If you have credit cards where the balance is more than half of your credit limit, pay these down right away. Your credit score can be negatively impacted if you are carrying a large balance compared to the available credit you have. While you are paying off these cards, reduce the balance to a small percentage of your available limit.
An installment account is a great way to increase your credit score. When opening an installment account, you need to make a monthly payment, so get something you can afford. If these accounts are properly managed, they can provide a quick boost to your credit score.
If your creditors try to jack up your interest rates, do not pay them. If you are being charged a distressingly high interest rate, you may be able to talk to your creditor. On the other hand, you’re likely bound by a contractual agreement to pay any interest charged by lenders. You need to be able to prove the interest rates are too high if you want to sue your lenders.
Before using a credit counselor, it’s important to research them completely. Many may have ulterior motives, so make sure you are not being duped. Some are simply fraudulent and are out to get your money. Smart consumers make sure that a credit counselor is legit before starting to exchange any money or sensitive information.
Avoid credit schemes that will get you in trouble. As we speak, people are trying to take advantage of illegal practices to have people create credit files that can get them into trouble. Doing this is illegal, and you will be caught. You could end up owing a great deal of money or even facing jail time.
If getting a new line of credit is vital to your credit improvement efforts, look into joining a credit union. Local credit unions might have different credit products than national banks, because they can focus on local market conditions.
If you find any errors on your credit report, you should dispute them. Send a letter to all agencies involved. Include the errors you noted along with supporting documents that prove that the information on file is erroneous. When you mail your dispute package, be sure to make arrangements for confirmation of receipt. In this way, you will have documentation that your information has been received.
In order to get a hold on your credit, focus on closing all accounts except one. Making one monthly payment will be easier than paying off different bills. It is much easier to manage one large monthly payment than it is to keep track of multiple smaller ones.
Make sure to review your credit card statement monthly to make sure there are no errors. If you spot any mistakes, contact the credit company right away to keep them from reporting the mistakes.
If you and your creditor decided to set up a payment plan, you should first get the details of the plan in written form. 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. Once the debt is fully paid, you need to get a statement verifying this from the creditor and send it to each of the major credit bureaus.
When you start fixing your credit, pay down balances on the credit cards as soon as you can. Start by paying the cards or accounts with the highest interest rates. It is your job to turn it around and prove your responsible with credit.
This is to keep your credit in good standing. Late payments to credit cards are reported to the major credit agencies and can hurt your chances for securing a new loan.
Take the time to carefully go over your monthly credit card statement. You should make sure that the charges that you get are right, and that you’re not paying for items you did not buy. It’s up to you to make sure that every item on your bill is correct and dispute those that are not.
Reducing the outstanding balances on some of your credit cards can improve your credit rating. You can up your credit score by just keeping your balances lower. The FICO system makes a note to your credit report every time your account balance reaches a new 20% increment of your total available credit.
Put these ideas to use so you can repair your credit and stay on top of good credit practices. Having a solid credit score can impact many important purchases that you make, so taking time from your busy schedule to read up on this subject is always a good idea.