Dealing with the complications that arise from having a less than perfect credit score can be quite stressful. When your past unwise decisions haunt you, it can be very frustrating. It may not be the easiest thing you’ll do, but it is possible to clean up your credit. Here are some great ideas to get you back on track.
Creating a payment plan and sticking with it is just the first step to getting your credit on the road to repair. You must be committed to making real changes in the way you spend money. Purchase nothing but the essentials. You should only make a purchase if it is necessary and it fits in your budget.
When your credit is so bad that you can’t get a ‘regular’ credit card, a secured one will help you to repair your credit. Anyone can get one, but you must load money onto the card as a type of “collateral”. Responsible use of any credit card can help your credit rating. However, never forget that irresponsible use will get you in trouble every time.
Try to keep a balance of less than 50% of your available credit on all of your cards. When balances are over 50%, your credit rating goes down significantly, so try to either spread out your debt or, ideally, pay off your credit cards.
Credit Score
By maintaining a good credit score, you can decrease your interest rate. Lower interest rates make it much easier and quicker to pay off balances. Obtaining the best possible interest rate saves you money, and helps you maintain your credit score.
Good credit scores allow you to take out loans, buy a house, and make other large purchases. Making mortgage payments in a timely manner helps raise your credit score even more. Credit rating companies will judge you a reliable risk when you have verifiable assets such as a home. If you have to borrow some money, you will need this.
Installment Account
Opening up an installment account will help you get a better credit score and make it easier for you to live. Open an installment account that you can pay for and make sure to keep an affordable monthly minimum on it. Handling an installment account correctly will help you improve your credit score in a short period of time.
Work with the companies to whom you owe money to get your debt back under control. This will assure them that you want to handle your debt and keep you from getting even further behind. One way to tackle this problem is to call them and ask if you can have the due date or monthly charge amount changed.
Before you choose a credit counseling agency, find out more about them. While many counselors are reputable and exist to offer real help, some do have ulterior motives. Some are not legitimate. A wise consumer will find out if the credit counselors they deal with are legitimate or not.
Do not involve yourself in illegal activities. There are schemes online that will show you how to establish an additional credit file. It’s illegal to do this and you can get caught easily. The criminal charges that you face will be very expensive, and you may also have to serve prison time if found guilty.
Credit Score
Before you agree to any sort of repayment plan to settle your debts, consider how this will affect your credit score. Some settlement agreements can actually be bad for your credit score, so be wary and do your homework. Most of the time they want their money and don’t care about your credit score.
If you are trying to repair your credit, check all of your negative reports very carefully. Errors are not infrequent in credit reports. If you can prove the credit bureau is in the wrong, they should correct the reported error or remove it entirely.
If you come across a mistake on your credit report, don’t hesitate to dispute it. Include proof along with a letter disputing the claim to the agency that recorded the errors. Make sure when you send the dispute package that you request proof by signature that it was received.
Credit Card
Close all your credit cards except for one as a means of repairing your credit. Call your credit card company and try to work out a repayment plan, or transfer the balances of multiple cards to one lower interest card. Instead of paying several smaller credit card bills, you can work to pay off one credit card.
Some of the worst stress you experience with bad credit is caused by debt collection agencies. The consumer can use cease and desist orders, but these only stop harassment. This doesn’t let the customer off the hook for the debt, it merely stops the threatening calls.
Apply these tips to fix your credit quickly. Because you are rewriting your credit report, you need to be consistent in making all of your payments. It is possible to repair your credit, so get to work!
