Your credit can easily be damaged by careless shopping sprees, too many credit cards or by an unexpected financial emergency. The good news is that there are some things that you can do to repair it.
Develop a plan that works if you are in need of credit score repair. You can’t just make up a plan and not change how you spend your money. Only buy the things that are absolutely necessary. Ask yourself how necessary each purchase is, and how affordable it is too. If you can’t answer “yes” to each of the questions above, you need to reconsider the purchase.
If you can’t get a normal card due to low credit score, look into a secured card. This card will be more than likely be granted to you, however you must fund the account ahead of your purchases as a sort of “insurance” to the bank that your debts will be paid. A responsibly used new credit card will begin healing your credit score.
Credit Cards
If you have credit cards with balances that are greater than fifty percent of the maximum, you should pay those down as quickly as possible. It’s best to keep all of your credit cards below the fifty percent mark! 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.
By keeping your credit score low, you can cut back on your interest rate. It will lower your monthly payments, so your debt will be taken care of at a much quicker rate. Asking for a better deal from your debtors can help you get out of debt and back to achieving a better credit score.
If you’re trying to fix your credit, be sure to check all your negative reports carefully. Even if the negative report is true, if you can locate an error in the report, it may be possible to get it removed.
Take the necessary steps to fix any mistakes that you see on your credit reports by filing an official dispute. Draft a letter to reporting agencies disputing negative entries and also submit any available documentation. Make sure when you send the dispute package that you request proof by signature that it was received.
If you are able to negotiate a repayment plan with your creditor, be sure to get it in writing. This will protect you should the company change its policies. After you have paid the debt off completely, keep your receipt in case there are any discrepancies on your credit report.
If at all possible, avoid filing bankruptcy. It is noted on someone’s credit report for 10 years. It may sound like a good idea at the time to rid yourself of all your debt, but it will affect you later on. Once you have filed for bankruptcy, it may become very difficult to secure a loan or open a new credit account.
Making your payments on time shows lenders that you are serious about maintaining good credit. Every late credit card payment can damage your credit score.
Take the time to carefully go over all your credit card statements. Make sure the charges on your credit cards are accurate. You are the only one that can verify if everything on there is the way it should be.
Collection Agencies
Having to deal with debt collectors is often very stressful and distressing. Remember that when dealing with harassing collection agencies, consumers have the option to issue a cease and desist letter to stop the harassment. Even though these letters will stop the phone calls from collection agencies, the individual is still responsible for paying the disputed debt.
It is the worst when you have many debts that you are unable to pay. You should spread out the money you do have to spend so that all of your creditors get a share. Even if you are only making minimum payments, sending along at least a little money will mollify your creditors and prevent them from contacting collection agencies.
Threats are illegal. If a collection agency is treating you roughly, you could sue them. Laws such as the FDCPA exist to stop debt collectors from harassing debtors.
Payment Plan
If you can’t make your monthly payments, contact each of your creditors to see if you can work out a payment plan you can afford. 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. This can also make your financial situation easier by letting you pay more on those accounts where you have not been able to set up an alternate plan.
Begin reducing your debt. The amount you owe compared to your income has a huge impact on your credit score. You are thought to be a bad credit risk if you have alot of debt in comparison with your income. You are not likely to be able to pay off the debt in full right away, so you should make a plan to repay in a timely fashion and follow that schedule.
At first, it may seem impossible to repair your damaged credit. However, with some effort and the right advice, you can start to improve your credit rating and eventually regain a credit score that will instill faith in any lender. Put the information you just learned into practice and start repairing your credit today.
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