Having a poor credit score is among the most frustrating situations that takes the fun out of life. Bad credit and keep you from great opportunities as they arise. But, you can fix your credit in a few simple steps and protect it for the future.
If your credit history has put you in the position where you are not able to obtain a regular credit card, you should try to get a secured credit card to begin rebuilding your credit. When you open a secured credit card account, you place money on deposit to cover any charges you may make. This ensures in advance that you will have enough money to pay for your debt. Limited spending and regular payments can turn a new credit account into a valuable credit score repair tool.
If you have credit cards where the balance is more than half of your credit limit, pay these down right away. Carrying a balance of more than half your credit limit negatively impacts your credit score. Either pay this balance down or spread it out over multiple cards.
Credit Score
The higher your credit score, the lower the interest rate that you can obtain will be. Lower interest rates make paying bills easier, and prevents you from incurring debt. Getting a good offer and competitive credit rates is the key to credit that can easily be paid off and give you a good credit score.
A good credit report means you are more likely to get financing for a home. When your mortgage is paid in full, you will be rewarded with increased scores on your credit file. Home ownership also means you have assets that you can rely on to increase your credit score. If you have to borrow some money, you will need this.
If you find that you have a credit card and the interest rate has gotten to high, you do have the option to not pay the debt, though there will be consequences. When a creditor hits you with incredibly high interest rates, you may have a case for negotiating to a lower amount. Remember that you agreed to pay that interest when you signed the contract. Should you sue any creditors, it is important to push the fact that the interest rates are outrageously high.
It’s vital that you actually begin paying the bills that you have if you want to improve your credit. More specifically, pay them on time and in full. As soon as you have cleared those old debts, you will see an immediate improvement in your credit score.
Though it is an unsettling prospect, consider asking your credit card provider to reduce the amount of credit extended to you. It will pay off in lowering the risk of excessive borrowing and reflecting good financial decision making on your behalf.
When you are attempting to improve your credit score, carefully comb over your credit reports for negative information. Even if the negative report is true, if you can locate an error in the report, it may be possible to get it removed.
Dispute any errors that you find on any of your credit reports. Report any errors to the three credit reporting agencies. Be sure to include any documents to support your case. Always send your dispute letters certified mail, so that you can get return confirmation. This will give you proof that the agency received your dispute paperwork.
It is important to carefully review your monthly credit card statement. If this is the case, you need to call the company right away to avoid them from reporting it to credit reporting agencies.
If you wheel and deal and get a new payment plan, be certain to have it on paper. This way you have documentation of the agreement in case the creditor decides to change their mind or ownership of the company changes. You also want it in writing if it gets paid off so you can go ahead and send it to credit reporting agencies.
Avoid bankruptcy at all costs. When you file for bankruptcy it shows for 10 years, your credit report will suffer from this. While ridding yourself of most debt may seem ideal, it is not without consequences. Once you have filed for bankruptcy, it may become very difficult to secure a loan or open a new credit account.
Credit Card
Take the time to carefully go over your monthly credit card statement. You will need to read over every charge on your account to check that it is accurate. You are responsible for the accuracy of information on your credit card statments.
Our initial inclination is to defend ourselves, but in truth, lenders will not even glance at your defending statement. Do not draw more attention than needed to the bad marks on your report.
Following these simple tips can help you get on the road to repairing your credit and keeping it healthy. Because a good credit rating is important in so many financial transactions, the time you spend learning about credit improvement is well-spent.