If your credit is bad, you can find it difficult to make some of the more basic financial decisions in life, like taking out a loan or leasing an automobile. If you ignore bills and pay fees late, your credit score will suffer. If you have a credit score below 650, you need to read this article right away.
If you have credit cards with a balance that exceeds 50% of your credit limit, you must continue to pay on them until the balance is lower than 50% of the credit limit. Your credit score can diminish with balances over 50%, so spread out the debt or pay off the credit cards.
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 provides financial stability which is backed by your asset, the home, and as such, results in great credit. That way, you will be in a better position to secure loans in the future.
You won’t be able to repair your credit until you are able to pay those bills. More importantly, you need to start paying your bills in full and on time. Your credit score will increase if you are consistently paying back your debts.
Work with the companies to whom you owe money to get your debt back under control. Doing so will help you to ensure that you do not go further into debt and make your credit worse. Contact your credit card company and request to change your scheduled due date or interest rate.
Do not get mixed up in things that may lead you to imprisonment. 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. Legal repercussions will cost you a lot of money, and you could go to jail.
Credit Card
Contact the credit card company and ask to get your card limit lowered. This is likely to keep you from overusing credit, which can be a financial burden. It also lets credit card companies know that you are responsible, and this makes them more likely to extend credit to you as time goes on.
Learn what affect a debt settlement plan will have on your credit rating before you sign up. Some ways of dealing with debt repayment are better for your credit score than others, so make sure you are achieving the best outcome for you before you sign anything. The creditor is only interested in receiving the money due, and is not concerned with your credit score.
Try joining a credit score if you’re still struggling to boost your credit rating by opening new lines of credit. Credit unions may be able to offer more credit options or better rates than a larger bank, based on an understanding of the local area rather than the national situation.
If you and a creditor agree on a payment plan, make sure the agreement is committed to paper. This will give you important documentation in case of an ownership change or if the creditor tries to back out of the agreement. Upon completion of payment, make sure to get the receipt in writing and send it to the credit reporting agencies.
The most obvious way to get your credit score improvement journey going is to pay down those pesky credit card balances. No matter what the balances are on your credit cards, pay down the highest interest rate cards first. 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.
Take the time to carefully go over all your credit card statements. Go through line by line for accuracy, and to prevent getting charged for an item or service you did not actually get. Do not trust the credit card companies to have your back, guarantee you do not pay debt that is not yours yourself.
Try lowering the balance of any revolving accounts you have. Simply lowering the balances on your open credit accounts can give quite a boost to your credit scores. FICO will base your score on what percent of your available balance is in use, so keep that in mind.
Collection Agencies
Debt collection agencies are the most difficult part in having bad credit. A consumer has the legal option of using cease and desist letters to dissuade collection agencies, but it is vital to keep in mind that C&D letters only stop harassment. Even though these letters will stop the phone calls from collection agencies, the individual is still responsible for paying the disputed debt.
Do not assume that a lawyer is being honest when he or she claims that they can fix your credit instantly. Because of the surge of credit issues out there, a lot of unscrupulous lawyers advertise that they can repair your credit for large fees. Do a thorough background check on any lawyer advertising credit restoration services before handing over any money.
Note down any threats you receive from creditors or collection agencies because they are breaking the law by threatening you. Become knowledgeable regarding the laws that are in place to protect consumers.
If you are experiencing difficulties paying your monthly expenses, you should get in touch with your creditors right away to develop other payment plans. Often, a creditor will work with you to devise a repayment plan that is not reported to credit bureaus if you are proactive about contacting them. Additionally, this will take some pressure off and help you pay down balances associated with creditors who won’t work with you.
Every adult who needs any kind of loan needs to focus on their credit score. It is possible to fix your credit situation. This is true even when you are carrying debt.
This is a limited-time offer. We are not able to guarantee availability if you wait!
