You need not suffer the effects of bad credit, no matter how you wound up with credit problems. Whether you have been personally damaged by economic conditions, victimized by dishonest lenders or even were simply too carefree in your spending, you deserve better credit. You can reverse the effects of these actions though.
Credit Score
The higher your credit score, the lower the interest rate that you can obtain will be. Lower interest rates make paying bills easier, and prevents you from incurring debt. Obtaining the best possible interest rate saves you money, and helps you maintain your credit score.
By opening an installment account, it could help improve credit score and you could have a decent living. You need to review the terms of an installment account carefully, because you’ll be required to maintain a certain monthly minimum. Handling an installment account correctly will help you improve your credit score in a short period of time.
Any company or credit counselor that claims they can erase all negative reports from your credit history should be viewed with some skepticism. Negative info stays on your history for seven years! However, information that is not correct can be removed.
An important tip to consider when working to repair your credit is to work closely with your credit card companies. Maintaining contact shows your good faith and can help you minimize further debt. Don’t be afraid to ask for alterations in interest rates or dates of payment.
Make sure you check out any credit counseling agency you consider using. While many counselors are reputable and exist to offer real help, some do have ulterior motives. Some credit services are nothing more than fly-by-night scams. Smart consumers make sure that a credit counselor is legit before starting to exchange any money or sensitive information.
Do not try something that you do not know is legal or illegal. A common scam involves teaching you how to make a completely new, albeit fraudulent, credit file. Of course, this highly illegal, and it will cause you even more problems, because it will not go unnoticed. Think of the legal costs and the possibility of doing hard time.
Call each of your charge card companies and ask them to lower the limit on them. This will keep you living within your budget, and will show the credit companies that you repay debts. This will allow you to get credit easier in the future.
If you come across a mistake on your credit report, don’t hesitate to dispute it. Draft a dispute letter that will go to each credit rating agency that shows an error, and prepare any supporting documents. Also include a request for a return receipt to make sure the agency gets it.
Check over your credit bill each month to make sure there are no errors. If this is the case, you need to call the company right away to avoid them from reporting it to credit reporting agencies.
Bankruptcy should only be viewed as a last resort option. This negative mark will stay on your report for 10 years. Bankruptcy not only zeros out your debt, it also zeros out your credit score. By filing for bankruptcy, you might have a lot of trouble getting a credit card or qualifying for a loan in the future.
Credit Score
Doing this will ensure a good credit score. Every late credit card payment can damage your credit score.
Read every credit cart statement you receive in full. Errors are not as rare as you might think. You will need to read over every charge on your account to check that it is accurate. You are the only one that can verify if everything on there is the way it should be.
Try lowering the balance of any revolving accounts you have. Having a lower balance will boost your credit score. When balances reach anywhere from 20-100% of your available credit balances (in 20% intervals), the FICO system will make a note.
Unfortunately, no financier is going to be interested in the statement you provide when they are examining your credit history. If anything, it will just hurt you as it will draw attention to the negative event.
If a company or collector threatens you, take a record of it because it is illegal. As a consumer, you are protected by certain laws, and you need to be aware of them.
Give your creditors a call and negotiate payment plans for bills that you can’t pay in full. If you respect them by giving them a notice that you are having difficulty, it is more likely that they will arrange a payment plan with you without reporting you to the credit bureaus. This may also alleviate some financial stress and allow you to work on paying off any debt accounts where you are not allowed to make a repayment plan.
Erase your debt. Potential creditors will look at your debt to income ratio. If your debt exceeds your assets and income, then most creditors will view you as being too high a risk. The average person can not pay off their debt immediately. A good payment plan is essential to get any debt paid off as soon as possible.
Addressing a bad credit report might seem daunting at first, but if you learn the tricks and stick to the process, you can improve your credit dramatically. With the tips above, you are better prepared to take action and get your credit situation back where it should be.
