Dealing with the complications that arise from having a less than perfect credit score can be quite stressful. It can be even more stressful when you have to deal with poor past decisions. Rebuilding credit may be challenging, but it is not impossible. Continue on for some helpful credit restoration tips.
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. Anyone can get one, but you must load money onto the card as a type of “collateral”. A responsibly used new credit card will begin healing your credit score.
If your credit card is carrying more than half of its credit limit, your first priority should be paying it down until it is below 50%. Any time you exceed 50% of your credit limit, your credit rating is affected. Pay off credit cards as fast as you can, or spread the debt out further.
Think about getting an installment account to save money and improve your credit score. An installment account requires that you make a minimum payment each month. It is imperative that you only take an installment account that is affordable. If you can manage one of these accounts, your credit score should improve quickly.
One thing to watch out for when trying to fix your credit is scammers who say that they can get any negative information deleted from your credit, regardless of its accuracy. All information remains on your credit report for a period of seven years or more. Know, however, that it is possible to delete information that is actually wrong.
It’s vital that you actually begin paying the bills that you have if you want to improve your credit. You can’t just pay whatever you want whenever you want. You need to pay your entire balance when it’s due. Once you have started to pay towards your past-due accounts, you credit score will gradually improve.
You can work with the credit card companies to start repairing your credit. Maintaining contact shows your good faith and can help you minimize further debt. Politely ask if it is possible to have your minimum monthly payment adjusted or due date changed.
If you’re trying to fix your credit, be sure to check all your negative reports carefully. The debt itself may be legitimate, but if you find errors in its metadata (e.g. the date, amount, creditor name), you might be able to get the whole entry deleted.
Credit Unions
If getting a new line of credit is vital to your credit score improvement efforts, look into joining a credit union. Credit unions typically offer a wider variety of credit options at better interest rates than a traditional bank. Credit unions are usually non-profit, which means better deals for you.
If you come across a mistake on your credit report, don’t hesitate to dispute it. You should compose a letter to the agencies that have made the errors, and provide proof that you are correct. Ask for a return receipt so that you can prove that the agency got your package.
Avoid bankruptcy at all costs. It is noted on someone’s credit report for 10 years. It might seem like a good thing but you will be affected down the line. It may be hard to get a credit card or a loan if you declare bankruptcy.
Credit Card Balances
The most obvious way to get your credit score improvement journey going is to pay down those pesky credit card balances. First, pay down your credit card balances, starting with the highest interest. Doing so shows your creditors that you are taking your debt problem seriously.
Take the time to carefully go over your monthly credit card statement. Go through line by line for accuracy, and to prevent getting charged for an item or service you did not actually get. If an error occurs, you should immediately notify your creditor.
Credit Score
Lowering the balances on any currently revolving accounts will increase your credit score. Reducing the amount of debt you’re carrying is one of the best ways to improve your credit score. The FICO system will make a note when the balances are at 20, 40, 60, 80 and 100 percent of the total credit available.
Find a legitimate credit improvement agency to work with. You have to watch out for credit improvement agencies that promise more than they can deliver or are simply fraudulent. Slimy operators are quite common, so beware of credit score repair scams. Read all the reviews that you can find and you should be able to make a decision about who you can trust.
Build your credit back up if your current credit scores are low. Prepaid credit cards offer you the ability to build credit while not having to worry about late payments or penalties. Potential lenders will see that you are working towards becoming more responsible with your credit.
Every time you open a new line of credit your credit score is going to suffer. Fight the overwhelming urge to say yes to a new credit card when it is offered to you at store checkouts, even if there is a large discount offered. As soon as you open a new credit line, your credit score drops.
Following the given advice will help tremendously in your credit building efforts. Consistency is crucial with this process, so be sure to stay up to date with your obligations. Rebuilding your credit is definitely possible, so stop fretting and get to work!