A poor credit score can put you in a bad position. If you’ve recently gone through some hard times, a bad credit score is just an ugly reminder of that experience. Fortunately, this article presents some ways you can begin repairing your credit, which can result in improved scores and greater peace of mind.
You will be able to get a lower interest rate if you keep your personal credit score low. This will help you afford your payments, and get out of debt quickly. Paying your outstanding balances on time is the best way to keep your credit in check, and to obtain lower interest rates.
Interest Rates
In order to make sure that you do not overpay, know that you can dispute your really high interest rates. When a creditor hits you with incredibly high interest rates, you may have a case for negotiating to a lower amount. Remember you agreed to pay any interest that accrued over the life of the account. You may wish to make a legal claim that the interest rate charged exceeded your state’s statutory limits.
Any company or credit counselor that claims they can erase all negative reports from your credit history should be viewed with some skepticism. Bad marks on your report will not go away for seven years. Know, however, that it is possible to delete information that is actually wrong.
Start paying your bills in order to repair your credit. You should pay your bills in full each month. Do not let them fall behind again and get yourself in trouble. Your FICO score will begin to increase immediately after you pay the bills that are past due.
Joining a credit union is beneficial if you want to make your credit score better but cannot get new credit. Due to their focus on community finances rather than national ones, credit unions may provide better interest rates and more credit services than typical banks.
If you come across a mistake on your credit report, don’t hesitate to dispute it. Create a dispute letter for agencies that have the error, and submit additional supporting documents along with it. Send your dispute package with a return receipt request so that you have proof that it was received by the agency.
If you have bad credit, have your credit cards merged into one single account. Make the minimum payment each month on your other accounts, but make the largest payment possible to the one account you are focusing on. This way you can work on paying one credit card balance off, instead of a bunch of smaller ones.
It is important to get any payment plan that you agreed to with a creditor in writing. 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. When you pay it off, send a written copy of proof of payment to all three credit reporting agencies.
Interest Rates
When you start fixing your credit, pay down balances on the credit cards as soon as you can. First, work on the accounts with the highest interest rates and the highest balances. Your debt will not grow as fast as before, if you get rid of high interest rates first, and your creditors will see you are making efforts.
This is to keep your credit in good standing. Paying late is placed on your credit report which can hurt your chances of getting a loan.
Carefully read all of your credit statements. Go through line by line for accuracy, and to prevent getting charged for an item or service you did not actually get. You are responsible for the accuracy of information on your credit card statments.
lenders will not read these statements when looking at your credit report. The less you can do to attract attention to negative reports, the better.
Avoid using your credit cards whenever possible. Purchase with cash. If you have a situation where you have to put a charge on your credit card, make a point to pay it off as soon as possible.
Credit Score
Opening additional lines of credit will negatively affect your credit score. When offered large discounts or incentives for opening a new credit card, politely reject the offer. Opening a new line credit line can immediately decrease your credit score.
Make sure to record any threats by debt collectors. This is an illegal form of intimidation and should be reported. Laws which protect debtors exist, and it’s vital that you understand them.
Get out of debt. Lenders are interested in how much money you owe compared to how much you make. You will be looked at as a bad credit risk if your debt is too much for your income to handle. Most people can not immediately pay off debt, so it is best to make a plan and stick to it.
Poor credit leads to pessimistic attitudes. These suggestions can help you get on track with fixing your credit.
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