You may be able to prevent forming debt simply by knowing exactly how much you owe and to whom. Now you must handle the crisis and fix your credit score. The following article includes some easy to follow advice to get you on the road to repairing your credit.
The first thing you need to do before beginning to repair your credit is outline th steps required to do so, then follow those steps without deviation. Unfortunately, the way that you approach spending money will probably have to be revamped. Limit your purchases only to things that are absolutely necessary. Before making any purchase, determine if it is within your means and if it is indispensable. Don’t buy the item unless you answer “yes” to both of these questions.
Secured Credit Card
If you want to repair your credit but do not qualify for a regular credit card, consider a secured credit card. Secured credit card applications have a high rate of approval because you must fund a security deposit against your credit limit. If you get a new card and use it responsibly, it will help to improve your credit score.
Try to keep a balance of less than 50% of your available credit on all of your cards. You should keep your balances under fifty percent; anything over this and you can lower your credit rating, so spread out the money you own and pay down your credit cards.
If you don’t want to pay too much at a time, you can avoid paying higher interest rates than you started with. Some companies that charge high interest rates are running the risk of having those rates challenged by consumers. However, you did sign an agreement to pay the interest. It is possible that you can sue a creditor and claim that the interest rate charged is unreasonably high.
Legitimate negative credit problems can not be easily wiped away from your credit rating, so be wary of companies that promise they can do so. You have to wait for seven years before negative data can come off your record. Items that you can get taken off your record are those that have been reported incorrectly or unfairly.
When trying to repair your credit, research any credit counselors you consider using very thoroughly. Many counselors are on the up-and-up and are truly helpful. Others just want to take money from you. There are a lot of people out there that are trying to take advantage of those who are down on their luck. If you’re smart, you’ll make sure the credit counselor is not a phony first.
Credit File
Avoid credit schemes that will get you in trouble. The Internet is rife with many scams that will go into detail about creating yourself a brand new credit file and making the old one magically disappear. Creating a new credit file is very illegal and you can be easily caught. Not only can legal fees add up, but you could end up in jail.
Before you agree to enter a debt settlement, learn about what happens to your credit as a result of it. Certain methods of settling your debts have less detrimental effects on your credit history. The creditor does not care what happens to your credit score, as long as they get their money.
One excellent way to get your credit score back up is to close all your credit cards except for one. You should arrange to make payments or make a balance transfer to your open account. You can pay down one credit card in full, rather than chipping away at many.
Credit Card
Check your credit card statement each month and make sure there aren’t any discrepancies. If you spot any late fees, immediately contact your credit card company. This can save you from having late payments reported to the credit reporting agencies.
Always get a plan in writing if you are going to do a payment plan that deals with creditors. You need to have a contract in writing so if the creditor goes belly up or they change your terms, you can catch them on it. If you manage to pay off your debt, make sure you receive proper documentation as proof to send to credit reporting agencies.
As this article has spelled out, fixing your credit is not rocket science, and it may be easier to do than you think. This information puts the lie to that notion, so start repairing your credit today.
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