Having bad credit is an extremely annoying issue to deal with. It can make you feel like you are in debtors’ prison with no hope of escape. But a few easy steps can help you repair your credit and guard it in the future.
Fixing credit reports must begin with a solid working plan that you are capable of adhering to. You can’t just make up a plan and not change how you spend your money. Don’t buy anything unless you absolutely need it. Ask yourself whether every purchase is both affordable and necessary, and only buy if the answer to both questions is “yes”.
Installment Account
If you make a decent income, consider an installment account when you want to give your credit score a boost. You have to keep a monthly minimum on an installment account, so make sure you open an account that you can afford. You might see a big improvement in your credit score, if you can handle an installment account responsibly.
If you want to fix your credit avoid companies claiming they can remove all of your issues, even those properly reported. It seems unfair, but accurate negative information will stick around for seven years. Be aware, however, that incorrect information can indeed be erased from your record.
You should consider talking to directly with your creditors when you are trying to improve your credit. This prevents you from sinking further into debt or further damaging your credit score. You can accomplish this by simply calling and asking them to change payment terms, like your interest rate or your billing date.
Before you get into an agreement about settling a debt, make sure you understand how it’s going to affect your overall credit. Some debt settlements are better than others. Do your homework and find out how your score will be impacted before agreeing to anything. Some creditors have no concern over how your credit score can be affected by entering into certain agreements. These people just want your money.
You should examine any negative entries on your credit report thoroughly if you want to fix your credit problems. While the credit item itself may not be in error, if you can find a mistake in the date, amount, or any other factor, you may be able to have the whole item removed from your report.
Credit Agency
If you find a mistake on your credit report, be sure to dispute it! Send a dispute letter along with supporting documents to the credit agency that recorded the errors. Make sure that you send the letter via recorded delivery, so that you can prove that the credit agency receives it.
Check your credit card carefully each month to ensure that there’s no incorrect information. If there are mistakes, call the company. If the errors are not fixed, they could get reported to the major credit rating agencies.
Pay off your entire balance on your credit card in order to repair your credit. Pay down your cards that have the highest interest and largest balances first. This will show responsibility to creditors.
Collection Agencies
The worst part of a credit crisis may be the collection agencies. Debtors can stop harassment by collection agencies with cease and desist notices, but know that this is all they do. Remember, even when the debt collectors stop annoying you by phone, your obligation to pay what you owe is not alleviated.
Come up with a way to pay off any existing unpaid debts. Though they will still be reflected on all three credit reports, they will show as paid so the ill effects are less substantial.
It is not legal for collectors to threaten you, so always report them if they get too aggressive. Know the laws in your state that can protect you from illegal practices.
Talk to creditors to try using alternate payment plans directly if you cannot make monthly payments. If you contact the creditors, sometimes they will offer you a repayment plan which isn’t reported to the credit bureaus. Additionally, this will take some pressure off and help you pay down balances associated with creditors who won’t work with you.
Get rid of your debt! When you apply for a loan, they take into consideration the ratio of your debt and your income. Your debt-to-income ratio is part of the formula used to calculate your credit, the higher it is, the more you are viewed as a risk. A lot of people do not have the capacity to completely pay off debt. That is why it is good to have a payment plan you can afford to stick to.
You can keep your credit report score high by paying bills in a timely manner. Sign up for payment reminders to make sure you remember to make payments. You can set up reminders in many ways. You can set it up through online banking, a calendar or an email reminder.
Investigate debt consolidation and see if it’s an option that can help you repair your credit. Consolidating your debts is a great way to reduce your debts if you are managing multiple debts. With a consolidation loan all accounts balances are combined resulting in one loan payment instead of several. Before committing to a consolidation though, make sure that it will actually help you.
Frequently contact any credit bureaus with which you are engaged in conflicts to expunge false or erroneous claims appearing on your credit report in order to stay updated on their progress. It is important to keep a record of all correspondence, whether it is via the telephone, regular mail or email. If you are going to use a dispute letter, make sure you get it certified so that you can prove it was received by the company.
Credit Score
A few easy steps, like the ones here, can help you repair your problems with credit and help you to maintain a healthy credit score. Having a solid credit score can impact many important purchases that you make, so taking time from your busy schedule to read up on this subject is always a good idea.