Having poor credit can be a serious hindrance to moving forward with your life. Your financial options will diminish, fewer options will be open to you and you will not be able to take advantage of new credit line offers. Here are a few steps you can take to restore and protect your credit score.
Look at the credit card accounts you have with a balance over 50% of the credit limit. Pay those off until they fall under this number. Your credit score can diminish with balances over 50%, so spread out the debt or pay off the credit cards.
You can get better interest rates on credit cards and loans when you have a good credit score. By doing this your monthly payments will be easier to afford and your bill will be paid off faster. Try to get the best offer and credit rates so you can increase your credit score.
Installment Account
Try an installment account to get a better credit score and make some money. With an installment account there is a monthly minimum you need to keep, so only open an affordable account. If you use these accounts, your score will go up rapidly.
Find out how your debt settlement contract will make your credit score look. Some debt settlements are better than others. Do your homework and find out how your score will be impacted before agreeing to anything. The creditor does not care what happens to your credit score, as long as they get their money.
Dispute any errors that you find on any of your credit reports. Include proof along with a letter disputing the claim to the agency that recorded the errors. Include a request for a return receipt with the dispute package so that you can prove it was received by the appropriate agency.
Make sure you will get a plan in writing if you decide a payment plan is the best option for you with your creditor. Having the plan in writing will protect you if the creditor reneges on the plan or if your debt is transferred to another creditor. Every time you get a debt paid off, ask the company to notify the credit bureaus.
You may want to argue against the reports, but potential lenders will not take your statements into consideration. The most it will do is draw more attention to the bad aspects of the report.
Avoid using your credit cards. Try to use cash when purchasing. When you do use a credit card, pay off the balance in full each month.
Some of the worst stress you experience with bad credit is caused by debt collection agencies. You can get a collection agency to cease and desist from harassing you but this does not discharge the debt. This doesn’t let the customer off the hook for the debt, it merely stops the threatening calls.
Be wary of any company that tells you they can instantly fix your credit. There are a lot of scam lawyers out there who will charge you a lot of money for credit restoration techniques that don’t really do much. Check up on the track record of any lawyer whose credit advice you intend to seek.
If a credit collection agency or credit card company threatens you in a way that goes beyond the law, make a note of it. You need to know what the laws are that protect your rights as a consumer.
Credit Counseling
If you are having trouble creating or maintaining a budget, discuss your situation with a credit counseling service. These types of organizations can often help you make a deal with your creditors for a repayment plan. In addition, they can assist you in gradually improving your finances. Credit counseling can help you get back on your feet again financially, and teach you how to better manage your financial situation.
Contact your creditors directly to work out alternate payment plans if you are having difficulty making your monthly payments. If you respect them by giving them a notice that you are having difficulty, it is more likely that they will arrange a payment plan with you without reporting you to the credit bureaus. As an added benefit, this may alleviate some financial strain allowing you to focus on accounts where an alternate repayment plan is not available.
Investigate debt consolidation programs to see if their services can help you improve your credit rating. Consolidating your debts may be the best way for you to reduce your debt and fix your credit. You will only have to make one payment, since all your debts will be together. Before signing up for bill consolidation it is important that you understand exactly what it is and how it benefits you.
Check your credit report carefully before accepting discrepancies as valid. No one is perfect, not even your bill collectors. Mistakes can be made and it is your responsibility to make sure they don’t negatively affect you. You can dispute this issue which, when approved, could be removed from your credit. Know that doing this is easy, but it could be time consuming.
If you’re having a tough time fixing your credit, starting a consolidation program for your debt may be the best thing you can do in order to improve your poor credit. By simply combining all your debts into single monthly payments, you can greatly simplify your budgeting and expense tracking. Doing so can help you to pay and improve your credit rating.
Make sure to make your payments on time if you wish to fix your credit history. You should always contribute something, even if it is only the minimum payment. Just one missed payment can cause damage to your credit.
The tips you just read are just a few simple strategies you can employ to rebuild your credit and keep it squeaky clean going forward. No matter how much time you spend researching ways to repair your credit, it will be well worth it, since a respectable credit score is essential to many important financial transactions you will need to make over your lifetime.