There are many downfalls to having bad credit, including preventing you from getting a loan approval, or leasing a car. Two of the biggest causes of low credit scores are late payments and delinquent payments. If you have a credit score below 650, you need to read this article right away.
When you want to fix your credit, you need to start somewhere. Have a realistic plan and stay with it. Unfortunately, the way that you approach spending money will probably have to be revamped. Stick to the essentials, and avoid frivolous purchases at all costs. Look at your purchases closely. If you cannot afford something, and you do not need it, do not buy it.
Credit Card Account
There are secured credit cards available if your credit rating is too low to open up a regular credit card account. Most likely, you will not have a problem obtaining this type of card, but you must add funds to the account before you make any purchases to assure the bank that you will pay. If you open a credit card account, keep charges fairly low, and pay it on time, this will go towards improving your credit score.
With a good credit score, you can easily buy a house and mortgage it. If you pay your mortgage as agreed, your credit score will rocket into the stratosphere. Owning a home shows financial stability, which is great for your credit. If you have to take out a loan, this will help you.
When trying to improve bad credit, beware of companies who promise that they can erase any negative, but correct items, on your credit report. It seems unfair, but accurate negative information will stick around for seven years. It is possible to have erroneous information removed from your report, however.
When you are attempting to improve your credit score, carefully comb over your credit reports for negative information. Any mistakes, such as in the amount owed or the date the agreement was entered, could result in the removal of the entire negative trade line on your credit report.
Avoid spending more money than you make. This may mean that you need to alter the way you have been thinking. In past years, people used good credit ratings to buy the items that they normally couldn’t afford, and they are now currently paying big payments. Instead of spending more than you can afford, take a long hard look at your income and expenses, and decide what you can really afford to spend.
Credit Card
Always examine your monthly credit card bill to make sure everything is accurate. Immediately report any errors to your credit card company to prevent a bad mark on your credit report.
If you are able to get a payment plan worked out with any of your creditors, make sure you get the terms in writing. This is the only way that you have of protecting yourself. Once you make the final payment, get a statement that verifies that the debt has been satisfied and send it to the various credit reporting agencies.
Go through all the statements you receive. You are looking to see that every charge is correct and determining whether or not you are being charged for an item you didn’t buy. If an error occurs, you should immediately notify your creditor.
You should locate a good credit score repair company to help you. There are far too many of these companies that are quite simply fraudulent. Some people have turned over all of their financial information to people who turned out to be scam artists, and they wound up in worse shape than before they started. If you read enough reviews, you can find out which ones are good and which are bad.
Attempts to defend negligence or bad credit will not succeed, even if they are justifiable. The creditors are only worried about results and numbers. The action of making a statement about your negative history will work against you as it highlight your mistakes rather than downplaying them.
Collection Agencies
Collection agencies are stressful to deal with. Cease and desist documents can be used to hold back collection agencies, but only to stop harassment. Letters such as these prevent calls from collections agencies, but the consumer must still pay the debts under dispute.
Do not trust anyone who promises you miracle results. Since many people have credit issues every day, there are now scam lawyers that promise to repair them. They charge large fees, and most of the time the services they provide are illegal and have no worth. Check up on the track record of any lawyer whose credit advice you intend to seek.
It’s especially painful to have a lot of different debts that you can’t pay all at once. Take the money you have set aside for debt payments, and divide it up into portions for each debtor. A small part payment is always going to be preferable to those you owe money to than no payments at all. By making regular contributions to your debts, you should be able to keep the collection agencies at bay.
Credit Card
New lines of credit either long-term loans or a new credit card will initially lower your credit score. When you are at the checkout, resist the urge to open a new store credit card. As soon as you open your new credit card, your credit score will drop.
Work with collectors to create a realistic repayment plan. While this will not remove the debts from your credit report completely, they will be showing as paid and no longer negatively affect your rating.
Credit Counseling
If you are having trouble creating a budget, or difficulty abiding by one, reach out to a credit counseling organization. These agencies can normally negotiate with your creditors on your behalf so as to come up with an affordable repayment plan. Credit counseling can help you get back on your feet again financially, and teach you how to better manage your financial situation.
Credit scores will affect those who want to take out any sort of loans. If you have a poor credit score, take note of the tips below and start to repair your credit.