If you knew how much you owed and who you owed it to, you may have been able to avoided bad debt entirely. It is now time to perform crisis management and begin to boost your credit score. You can repair your credit rating by following some of the great advice found in this article.
The first step in credit improvement is to build a plan. You need to make a commitment to changing your spending habits. Avoid buying what you don’t need. If the thing you’re looking at is not both necessary and within your budget, then put it back on the shelf and walk away.
Try to get a secured credit card if you are not eligible for an unsecured card. This will help you fix your credit. Anyone can get one, but you must load money onto the card as a type of “collateral”. If you show a good history of payments with this card, it will help improve your credit standing.
If you have credit cards with a utilization level over 50%, then pay them down until they are below 50% utilization. Carrying a balance of more than half your credit limit negatively impacts your credit score. Either pay this balance down or spread it out over multiple cards.
Interest Rates
If you want to avoid giving too much to your creditor, simply refuse to pay towards unfairly huge interest rates. An interest rate that is shockingly high can possibly be ruled as illegal in certain cases. You did however sign a contract that agrees you will pay off all interests as well as the debt. If you choose to bring a lawsuit against your creditors, use the high interest rates against them.
If credit score repair is something you are investigating and a company has told you they can strike true, but negative, information off of your credit report, they are lying. Bad marks on your report will not go away for seven years. Be aware, however, that incorrect information can indeed be erased from your record.
In order to start repairing your credit, you need to start paying your bills. Pay these bills on time, and make sure you pay the full amounts owed. As soon as you have cleared those old debts, you will see an immediate improvement in your credit score.
You need to work with the companies from whom you have credit cards. Maintaining contact shows your good faith and can help you minimize further debt. It is perfectly appropriate to call and request an adjustment to your interest rate or to push back a payment date if needed.
If you find any errors on your credit reports, dispute them. Gather all supporting documents and any errors you find, and send them with a letter to the credit reporting agencies. Use a return receipt when you mail your package so that you can prove that the agency received it.
Stop spending more money than you have available. This might be a tough thing to get your head around. A lot of people rely on credit to maintain an unrealistic lifestyle, but when the credit runs out, all that’s left is a very big bill. Look at your budget, and decide what is realistic for you to spend from month to month.
If you are able to negotiate a repayment plan with your creditor, be sure to get it in writing. This is the only way that you have of protecting yourself. Finally, when it is paid in full, get documentation thereof to submit to credit agencies.
Late Payments
This is the first step toward having an A+ credit rating. Late payments affect your credit report. Also late payments might prevent you from obtaining a loan should you need it in the future.
To accomplish getting a better rating on your credit, pay down the balances of your current accounts. You could increase your credit score just by paying down some balances. The FICO system will make a note when the balances are at 20, 40, 60, 80 and 100 percent of the total credit available.
One of the biggest stressors can be bad dealings with debt collection agencies. You can use a cease and desist letter to stop any harassment from collection agencies. A letter like this may stop a collection agency from harassing you, but you are still on the hook to pay your debts.
Each time you get a new credit card can negatively effect your credit score. Fight the overwhelming urge to say yes to a new credit card when it is offered to you at store checkouts, even if there is a large discount offered. As soon as you open your new credit card, your credit score will drop.
As this article indicates, paying off your debts and raising your credit score require a pragmatic approach more than anything else. Put these simple steps to use to repair your credit situation.
