Having bad credit can be stressful and annoying. It’s one of the main stumbling blocks to a successful life. It can limit opportunities and deny you of financial options. Yet, some simple steps can fix your credit and help you to keep your credit in good standing.
Any credit cards that have balances over 50% of your limit should be paid off until they are less than 50% of your limit. If your credit card balances exceed 50% of their limits, it will lower your credit score, so spread your debt over multiple cards, or better, pay down the balances.
Credit Score
It is easy to get a mortgage for a house if your credit score is good. Making your mortgage payment on time each month will also boost your credit score. Owning your own home also improves your credit score in the form of having large assets to borrow against. Having a good credit score is important if you need to take out a loan.
If you want to avoid paying a lot, you can pay off debts that have a huge interest rate. In many situations, exorbitant fees and penalties can be challenged. However, you signed a contract agreeing to pay off interests. If you want to sue creditors, you need to state your claim that the interest rates are too high.
Start paying on bills to help your credit. Paying your bills on time and for the full amount is important. Your credit rating can improve almost immediately when you pay off past due bills.
You need to work with the companies from whom you have credit cards. This prevents you from sinking further into debt or further damaging your credit score. One way to tackle this problem is to call them and ask if you can have the due date or monthly charge amount changed.
If you are trying to repair your credit, check all of your negative reports very carefully. Although a certain credit item may not have any error, finding a mistake corresponding to a date or an amount can have the same item taken out of your report.
Credit Union
Joining a credit union may be helpful if you want to work on improving your credit score and are finding it difficult to access new credit. You may find that the credit union has more options and better rates to offer you than banks will.
If you find any errors on your credit report, you should dispute them. Send a letter to all agencies involved. Include the errors you noted along with supporting documents that prove that the information on file is erroneous. Ask for a return receipt so that you can prove that the agency got your package.
If you wheel and deal and get a new payment plan, be certain to have it on paper. This way you have documentation of the agreement in case the creditor decides to change their mind or ownership of the company changes. After you have paid the debt off completely, keep your receipt in case there are any discrepancies on your credit report.
Do not file for bankruptcy. The record of the bankruptcy appears on your report and affects your credit rating for up to 10 years. It might seem like a good thing but you will be affected down the line. If you do file for bankruptcy, it will be extremely difficult to get approved for a loan or a credit card for many years, if ever.
Making your payments on time shows lenders that you are serious about maintaining good credit. Whenever you fail to make your payments on time, your credit report is affected negatively. This can make it very difficult for you to take out a loan in the future.
Credit Card
Take the time to carefully go over all your credit card statements. 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. Do not trust the credit card companies to have your back, guarantee you do not pay debt that is not yours yourself.
Do not carry high balances on any of your credit accounts. Your credit score can be raised just by reducing your balances. The FICO system notates when a balance on a card is at 20,40,60,80, and 100 percent of the total available credit.
These tips can help you repair your credit and keep it high. Having a good credit score is crucial to getting the best interest rates possible and is definitely worth the effort.
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