Having poor credit means you might not get the results you want from companies that look at your credit. Having negative credit limits what you can do and unfortunately, predetermines your future, as well. However, there is hope — you can repair your credit with a few steps and re-open those doors to access lower borrowing rates and other benefits once more. Follow these tips to repair your credit.
If credit score improvement is your goal, create a plan and stick with it. Make a commitment to making better financial decisions. Stick to the essentials, and avoid frivolous purchases at all costs. Before purchasing an item, ask yourself if it is absolutely necessary and well within your financial means. If you cannot answer each of these in the affirmative, do not buy the item.
Interest Rates
You can keep your interest rates lower by working to keep your credit score as high as possible. Lower interest rates make paying bills easier, and prevents you from incurring debt. Paying your outstanding balances on time is the best way to keep your credit in check, and to obtain lower interest rates.
Paying off any debts you have that have high interest rates can help you to avoid paying too much. Creditors are skirting a fine line of law when they try to charge you exorbitant interest rates. However, when you signed up for the line of credit you also agreed to pay the interest. The only way you are legally able to sue the creditors is if you are able to prove that your interest rates are much too high.
Some sound advice to follow, is to be sure to take the time to contact your credit card company and work with them. 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.
Make sure you review all of the negative marks against you on your credit report. There may very likely be errors or mistakes that can be removed.
Dispute every error you identify on your credit report. A dispute letter should be sent to any of the agencies that are reporting the error. Be sure to include supporting documents. Make sure when you send the dispute package that you request proof by signature that it was received.
Do not live beyond your means. This may mean that you need to alter the way you have been thinking. In many cases, people are using credit cards to buy things they want, rather than focusing on things that they need. You should look at what you can afford to spend, before using credit for purchases.
Credit Card
A first step in fixing your credit is to close all credit card accounts that are unnecessary. Aim to only have one account. You can transfer all of your balances to one credit card, ensuring you choose the one with the lowest interest rate. It is much easier to manage one large monthly payment than it is to keep track of multiple smaller ones.
Go over your monthly credit card statements to check for mistakes. Should there be any mistakes, contact the company and talk to them to avoid being reported to the credit companies.
Bankruptcy should be a last resort. It is noted on someone’s credit report for 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 for bankruptcy will make it very difficult for you to qualify for credit in the future.
Pay the balances on all credit cards as soon as you can to start the credit score improvement process. Sort your credit cards by balance and interest rate with the highest first. Then determine which credit card is the highest either in balance or interest rate and start to pay it off first. This helps creditors realize that you are using credit cards wisely.
Go through all the statements you receive. Take a second look to make sure that you are being charged only for what you actually purchased. It’s up to you to make sure that every item on your bill is correct and dispute those that are not.
Negative Reports
It is difficult to just forget about negative reports, but writing a statement is useless. The less you can do to attract attention to negative reports, the better.
Do not use your credit cards. Use cash to pay for things whenever possible. If you have no choice but to use a credit card, always pay the balance in full each month.
If you have suffered job losses due to the economy, you may not have the cash to pay all the debts you owe. You should spread out the money you do have to spend so that all of your creditors get a share. Even if you can only meet the minimum payment, you will avoid having the bill sent to collections.
If you fix your credit you can make your life more positive. You can do many things free of cost to fix your credit. Make the tips in this article work for you and enjoy your spotless credit.
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