Poor credit is a terrible thing for you to deal with as you journey through life. It can cause you to miss some great opportunities and take away some financial options. Follow these tips to start repairing your credit.
Pay down the balance on any credit card that is 50% or more 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 Counseling Agencies
Consumers should carefully research credit counseling agencies before choosing one with which to work. While there are lots of counselors with your best interest at heart, there are others who just want your money. Some credit services are nothing more than fly-by-night scams. Smart consumers will always check to see that credit counseling agencies are, in fact, legitimate before working with them.
Be very wary of programs that do not sound legal; chances are they aren’t. Sites may act like you can create new credit lines and tell you how to do it. You will be prosecuted, it is against the law. The criminal charges that you face will be very expensive, and you may also have to serve prison time if found guilty.
Dispute any errors that are on your credit report so they are removed. Send a dispute letter along with supporting documents to the credit agency that recorded the errors. Make sure that you ask for a return receipt so that you know your letter makes it to its intended destination.
If your credit is poor, take the first step to repairing it by closing out the majority of your cards, leaving yourself just one to use. Try to make a payment or transfer your balance to your open credit account. Paying off one main credit card will be easier than paying off several cheaper ones.
Bankruptcy should only be viewed as a last resort option. The record of the bankruptcy appears on your report and affects your credit rating for up to 10 years. While getting rid of your debts all in one go seems like an excellent idea, your credit will be affected by it for a long time to come. If you choose to file bankruptcy, you’ll be unable to get a credit card or loan in the future.
To show that you are serious about improving your credit, start systematically lowering all of your account balances. First, work on the accounts with the highest interest rates and the highest balances. This builds the positive credit history that creditors like to see.
This is to keep your credit in good standing. Late payments to credit cards are reported to the major credit agencies and can hurt your chances for securing a new loan.
Credit Score
To increase your credit score lower the amount owed on revolving accounts. Just lowering your balances can raise your credit score. When balances are 20, 40, 60, 80 and 100 percent of the total credit available, the FICO system takes note of it.
Look for a credit score repair agency that is legitimate. Just like any other field, credit improvement has plenty of companies that do not provide what they promise. Indeed, some people have fallen prey to credit score repair scams. If you do some online research, you can find out what people really think about the various credit restoration agencies. This will help tremendously in choosing a safe and effective company.
Try not to use your cards at all. Stick to your budget by only spending the cash that you have allocated for spending. When you find credit card spending unavoidable, pay down your balance immediately.
Write down a plan that guides you towards paying off your debts. These accounts will still appear on a credit report, but they will be earmarked as paid.
Following these simple tips can help you get on the road to repairing your credit and keeping it healthy. A good credit score is essential to financial freedom, take the time to learn about fixing your credit.
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