Due to the state of economy, it is no surprise that so many people have bad credit scores. The following tips will give you great information on how you can go about improving your credit score.
If credit repair is your goal, create a plan and stick with it. Real changes come from commitment to healthy spending habits. Just buy what you need, and forget unnecessary purchases. Look at your purchases closely. If you cannot afford something, and you do not need it, do not buy it.
If you have a card that carries a balance of over 50% of the limit, you should pay it down to below 50%. If you let your balances get too high, your credit rating will drop significantly. You can either spread your debt out by transferring some of the balance to low interest cards, or better yet, pay off as much as you can.
Installment Account
For a credit score boost, an installment account will help. You need to review the terms of an installment account carefully, because you’ll be required to maintain a certain monthly minimum. You might see a big improvement in your credit score, if you can handle an installment account responsibly.
Work with the companies to whom you owe money to get your debt back under control. If you do this you’ll find that your debt doesn’t increase and your credit is improved. Politely ask if it is possible to have your minimum monthly payment adjusted or due date changed.
Call and request lower limits on your cards from the credit card companies. This will prevent overextending yourself and lets the company know about your responsible borrowing habits. You could get credit easier in the future.
Take a look at your credit report if you have a bad score. The item may be essentially correct, but there may be an error someplace. If the date or amount, or some other thing is incorrect it may be possible to get the entire item removed.
If you find a mistake on your credit report, be sure to dispute it! You should contact the credit bureaus both online and by certified letter; be sure to include proof of your claims. Always send your dispute letters certified mail, so that you can get return confirmation. This will give you proof that the agency received your dispute paperwork.
If you are able to negotiate a repayment plan with your creditor, be sure to get it in writing. The documentation you gain from the creditor is important in case the company changes ownership or the creditor is no longer interested in the deal. You also want it in writing if it gets paid off so you can go ahead and send it to credit reporting agencies.
Avoid bankruptcy at all costs. This will reflect on your credit report for the next 10 years. You may think that bankruptcy is your only option to rid yourself from debt, however look at your long term financial goals before deciding to file for it. Filing bankruptcy makes it difficult if not impossible to get anything involving credit, like credit cards and loans, in the future.
Interest Rates
Pay the balances on all credit cards as soon as you can to start the credit score improvement process. First work on the cards with the steepest balances or interest rates. Your debt will not grow as fast as before, if you get rid of high interest rates first, and your creditors will see you are making efforts.
When you pay your bills on time, you are keeping your credit score high. Late payments to credit cards are reported to the major credit agencies and can hurt your chances for securing a new loan.
When you receive your credit card statement, go over it carefully. It’s up to you to ensure that the charges on your bill are correct and that you haven’t been double charged, overcharged or charged for something you didn’t buy. It is only your responsibility to make sure everything is correct and error free.
Credit Score
Use these tips to establish a plan of action for your credit score. Before your low credit score begins to adversely affect your life, use the information from this article to gradually increase your overall credit rating.