Bad credit is a very frustrating thing to deal with. A bad credit report closes doors to financial options and opportunities. Read on for some ways to fix your credit and reclaim your life.
The first step to repairing your ailing credit is to create a manageable, feasible financial plan. Make a commitment to making better financial decisions. Purchase nothing but the essentials. Consider if a purchase is both essential and affordable, and only purchase it if you can answer “yes” on both counts.
If your credit is such that you cannot get a new card to help repair it, apply for a secured one. These types of credit cards often require a good faith deposit to open a new account. If you show a good history of payments with this card, it will help improve your credit standing.
Legitimate negative credit problems can not be easily wiped away from your credit rating, so be wary of companies that promise they can do so. Bad marks on your report will not go away for seven years. Items that you can get taken off your record are those that have been reported incorrectly or unfairly.
When trying to repair your credit, research any credit counselors you consider using very thoroughly. While many counselors are reputable and exist to offer real help, some do have ulterior motives. Some are just people trying to scam you. If you’re smart, you’ll make sure the credit counselor is not a phony first.
If an action can result in imprisonment, draw the line. There are various online scams that involve creating a fresh credit file. Needless to say, this is against the law and you are likely to get caught. Taking these short cuts will end up costing you money and could lead to a stay in jail.
Put the spending brakes on yourself by lowering your credit limit on all of your cards. Not only will this prevent you from owing more, but it will be reflected in your credit score because it shows that you are responsible with your credit.
Before you agree to settle your debt, you need to know how your credit will stand afterwards. Certain methods of settling your debts have less detrimental effects on your credit history. Creditors are only trying to get the money that you owe them and could care less how that hurts your credit score.
Consider joining a credit union. They offer a lot of benefits to their members and it can be easier to obtain a line of credit from them. Credit unions often offer better interest and more options than chain banks do.
As part of your credit score repair process, it is a good idea to terminate all of your credit cards except one. Try to make a payment or transfer your balance to your open credit account. It is much easier to manage one large monthly payment than it is to keep track of multiple smaller ones.
High credit card balances can damage your credit. The first step to repairing credit is to pay those balances down. No matter what the balances are on your credit cards, pay down the highest interest rate cards first. By doing this, you will show your creditors that you are trustworthy with your credit.
If you are late with your payment, your credit status will suffer. Every late credit card payment can damage your credit score.
When you receive a credit card statement you should immediately look at the statement. Take a second look to make sure that you are being charged only for what you actually purchased. The responsibility lies with you to verify that each charge is accurate.
Do not use your credit cards. Pay for everything you buy with cash instead. If you absolutely have no other choice but to use a credit card, pay off the balance in full as soon as possible.
Collection Agencies
One of the most stressful aspects of handling bad credit is dealing with debt collection agencies. Cease and desist instructions can be used to ward off debt collectors to a point, but only really to prevent harassment. This will stop the calls from collection agencies, but that doesn’t mean consumers can keep ignoring the debt.
It goes without saying that if your credit is poor and needs repairing, you need to start from the bottom and build. Prepaid credit cards are one way in which you can repair your credit. These cards are used like a normal credit card and are reported to the credit bureaus; however, you can only use the amount of money you deposit into your account. Potential lenders will see that you are working towards becoming more responsible with your credit.
Work with collectors to create a realistic repayment plan. Though they will still be reflected on all three credit reports, they will show as paid so the ill effects are less substantial.
If you’re having trouble with creating, or living within, a budget, consult a highly regarded consumer credit counseling agency. Often times, these companies will work with the creditors to get negotiate a lower interest rate and an affordable payment plan that will help get your finances back on track. Credit counseling can help you get back on your feet again financially, and teach you how to better manage your financial situation.
Talk to creditors directly to figure out a different way to pay your bill if you cannot afford your monthly payments. If you make the first move and hash out a payment plan sometimes they won’t even report it to credit agencies. Another benefit of being proactive is that you can alleviate your financial burden and open up your ability to pay the bills on time that will not work with you on payments.
These tips can help you repair your credit and keep it high. Time learning how to repair your credit, means a great future with many transactions since you will have a good score.
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