Whether you fell prey to the guys handing out credit cards like candy on campus, got carried away on one too many shopping sprees or got hit hard by the recent economic downturn, you probably did some damage to your credit. Thankfully, there are methods in the below article that can help you mend this problem.
Try to keep a balance of less than 50% of your available credit on all of your cards. When your debt is over 50%, credit ratings usually go down. With that said, try to spread out the debt that you have or try paying it off.
Always do research before contracting a credit counselor. Many counselors are honest and helpful, but others may be less interested in actually helping you. Other options are clearly scams. Smart consumers will always check to see that credit counseling agencies are, in fact, legitimate before working with them.
Do not do things which could cause you to go to jail. Don’t buy into scams that suggest you create new credit files. Do things like this can get you into big trouble with the law. Not only can legal fees add up, but you could end up in jail.
Know how debt settlements will influence your credit score prior to making a decision. Some methods will be less damaging than others, and you need to research them all before signing an agreements with a creditor. Some are out there just to take your money; they don’t care about your rating.
If you are doing hardcore credit score improvement, you need to scrutinize your report for negative entries. Errors are not infrequent in credit reports. If you can prove the credit bureau is in the wrong, they should correct the reported error or remove it entirely.
Credit Card
In order to start repairing your credit, you should close all but one of your credit card accounts. Then, try to arrange payments or transfer your balances to the one account you left open. This way you can work on paying one credit card balance off, instead of a bunch of smaller ones.
Examine your credit card charges monthly to ensure they are correct. Contact the credit card company right away if there are incorrect fees, so that they won’t be on your credit report.
Bankruptcy should only be viewed as a last resort option. It is noted on someone’s credit report for 10 years. It may sound like a good idea at the time to rid yourself of all your debt, but it will affect you later on. Filing for bankruptcy will make it very difficult for you to qualify for credit in the future.
Pay off your entire balance on your credit card in order to repair your credit. First, pay down your credit card balances, starting with the highest interest. Doing so shows your creditors that you are taking your debt problem seriously.
Try and pay down any revolving account balances in order to boost your credit score. Maintaining smaller balances can improve your credit rating. The FICO system will make a note when the balances are at 20, 40, 60, 80 and 100 percent of the total credit available.
Unfortunately, no financier is going to be interested in the statement you provide when they are examining your credit history. It can even draw more attention to the bad spots, so don’t do it.
Avoid using those credit cards. Purchase with cash. Any credit card purchases should be paid in full the same month of purchase. Do not carry a balance on your cards.
Collection Agencies
Debt collection agencies can be the most stressful part of a bad credit crisis. 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. A letter like this may stop a collection agency from harassing you, but you are still on the hook to pay your debts.
If you have suffered job losses due to the economy, you may not have the cash to pay all the debts you owe. To make sure everyone gets a share, spread out your money distribution. Even if you can only meet the minimum payment, you will avoid having the bill sent to collections.
In order to rebuild your credit, take baby steps to start improving your score. Consider a card that requires payment in advance; this will improve your score without the risk of failure. You will prove to creditors that you can pay your bills.
Any time that you take out a line of credit it is going to negatively impact your credit score. When you are at the checkout, resist the urge to open a new store credit card. Credit scores are adversely affected by opening a store credit card, because of their high interest rates.
Nursing your credit back to good health is not as hard as it looks at first, especially when you are willing to make a persistent effort and listen to good advice. Apply the tips you learned here and get started on your way to good credit.
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