If you can’t sleep at night because of bad credit, it’s time to take action. The following advice will help in the path to getting your credit back on track.
Credit Card
When your credit is so bad that you can’t get a ‘regular’ credit card, a secured one will help you to repair your credit. Most people are able to get this type of card, but you will have to load it up with a prepaid amount of money, as a guarantee that you can pay any charges that you make. If you use a credit card responsibly, you will go a long way in repairing your credit.
If you have credit cards with a balance that exceeds 50% of your credit limit, you must continue to pay on them until the balance is lower than 50% of the credit limit. When your debt is over 50%, credit ratings usually go down. With that said, try to spread out the debt that you have or try paying it off.
You can easily get a mortgage if you have a high credit score. You can improve your credit by paying your mortgage on time. When you are a home owner you will be financially stable based on what you own. This will make taking out future loans much easier.
Installment Account
Opening an installment account can give quite a boost to your credit score. Make sure that you are able to afford the payments on any installment accounts that you open. You might see a big improvement in your credit score, if you can handle an installment account responsibly.
In order to make sure that you do not overpay, know that you can dispute your really high interest rates. The incredibly high interest rates can get challenged and reduced in some situations. Remember you agreed to pay any interest that accrued over the life of the account. Be very wary of suing your creditors, especially if all of your issues were covered in the contract.
If you are looking into a credit counselor, be sure to find out information about them before you choose to use them. Many counselors are on the up-and-up and are truly helpful. Others just want to take money from you. Other programs, while they sound good, are complete and total scams. A wise consumer will find out if the credit counselors they deal with are legitimate or not.
Credit Card
Give your credit card company a call and ask them to lower the limit on your credit card. This will stop you from racking up giant credit card bills, and show lenders you are responsible.
If getting a new line of credit is vital to your credit score improvement efforts, look into joining a credit union. 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.
Dispute any errors that are on your credit report so they are removed. Send an official letter to companies that have wrongfully lowered your score, and include documentation that shows the mistake. 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.
Many times you and your creditor can work together to come up with a prepayment plan. If so, be sure you get a written agreement stating the terms. If there is a change of heart, this paper will protect you. Finally, when it is paid in full, get documentation thereof to submit to credit agencies.
Timely payments will keep your credit status in good standing. Every time you pay late it is put on your credit report and will hurt you if you ever need a loan taken out.
It is important for you to thoroughly look over your monthly credit card statements. You are looking to see that every charge is correct and determining whether or not you are being charged for an item you didn’t buy. It is only your responsibility to make sure everything is correct and error free.
Credit Score
To increase your credit score lower the amount owed on revolving accounts. Your credit score can go up if you just bring your balances down. The FICO system makes a note when your balances are at 20, 40, 60, 80, and 100 percent of your available credit.
You may get into the situation that you have multiple debts and you just don’t have enough money to pay them all. Take the money you have set aside for debt payments, and divide it up into portions for each debtor. Even if the payments you are making are the minimum ones, these small payments will still somewhat please your creditors, which will likely stop them from getting in touch with collection agencies.
If your credit has suffered and you are trying to rebuild it, many options are available. Prepaid credit cards offer a risk and worry free opportunity to slowly increase your credit score. This approach will indicate to others that you are serious about taking responsibility for your financial future.
Your credit score suffers each and every time you make the choice to get a new credit card or line of credit. When you are at the checkout, resist the urge to open a new store credit card. As soon as you open your new credit card, your credit score will drop.
Credit Report
As you apply the advice you have read here, your credit report will change from a source of stress to a source of pride. You don’t have to be afraid of your credit score; you can improve it. By using these tips, you will have an ideal credit report.