If you knew exactly the amount and to whom you owed the money, you might not have been in debt to begin with. There is no better time than now to work on repairing past mistakes that can be adversely affecting your credit rating. The following advice is easy to put into practice, so read it and then put it to use.
When attempting to make your credit right once more, it is imperative that you present a solution to all those that you owe money to, and don’t deviate from anything you commit to once it is in place. You have to be committed to making real changes to your spending habits. Sticking to necessities for a while is crucial. Before you open your wallet ask the questions “do I need this?” and “can I afford this?” If the answer is no to either, put it back on the shelf.
If you have credit cards where the balance is more than half of your credit limit, pay these down right away. Creditors like to see you using your accounts, but still keeping your balances under 50% of your allotted credit.
Interest Rate
You can receive a better interest rate if you have excellent credit. This will help you afford your payments, and get out of debt quickly. Obtaining the best possible interest rate saves you money, and helps you maintain your credit score.
If you don’t want to pay too much at a time, you can avoid paying higher interest rates than you started with. You may be able to challenge an interest rate that is extremely high. It is important to take into account the fact that you did sign a contract and agreed to pay off the attached interest. If you decide to sue your creditors, you should be able to have the interest rates recognized as too high.
Many credit card companies are willing to help customers by eliminated late fees or lowering monthly payment amounts. When you work with company you are not working against anyone, including yourself. This will help prevent furthering yourself into debt. Talk to the company and see if you can change your due date or monthly fees.
Credit counselors should always be researched thoroughly before being consulted for credit repair. Although some can be quite legitimate, others have motives that are less than kind. Other counselors are nothing more than scam artists. You should always find out if a credit counselor is the real thing.
Contact your creditors and see if you can get them to lower your overall credit limit. Not only can this tactic prevent you from getting yourself in over your head with debt, but it can also imply that you are responsible to those companies and to any future companies.
Credit Score
Don’t sign a debt settlement contract until you know what impact it is going to have on your credit score. Some methods of credit settlement can be a blow to your credit score, so it’s important to check into your options and find one that won’t hurt you in the long term. The creditor is only interested in receiving the money due, and is not concerned with your credit score.
In order to get a hold on your credit, focus on closing all accounts except one. You should plan on how you will pay the remaining open balances, or how to consolidate them into one account. Doing so will allow you to pay off one individual debt rather than a multitude of lesser balances.
Credit Card
Check your credit card statement each month and make sure there aren’t any discrepancies. Contact the credit card company right away if there are incorrect fees, so that they won’t be on your credit report.
Try not to file bankruptcy if at all possible. Bankruptcy can make getting credit almost impossible for many years. Although it sounds like an easy way to get rid of debt, it will affect your life for a significant amount of time. It may be hard to get a credit card or a loan if you declare bankruptcy.
When you receive your credit card statement, go over it carefully. It’s up to you to ensure that the charges on your bill are correct and that you haven’t been double charged, overcharged or charged for something you didn’t buy. You bear the responsibility for looking after your own best interests, and you are the only person who will know if your statement is accurate.
Collection Agencies
Some of the worst stress you experience with bad credit is caused by debt collection agencies. Debtors can stop harassment by collection agencies with cease and desist notices, but know that this is all they do. Even when the phone calls from collection agencies have stopped, the associated debts must still be paid.
When you are involved in a credit crunch, you have many debts but not enough money to pay them. Try to divide all your available money between your creditors, so you can pay everyone at least something. Even if it’s only minimum payments, send as much as you can to each creditor in order to avoid them sending your account off to collection agencies.
Note down any threats you receive from creditors or collection agencies because they are breaking the law by threatening you. Become knowledgeable regarding the laws that are in place to protect consumers.
It is easy to get out of debt if you are patient and have common sense. This information puts the lie to that notion, so start repairing your credit today.
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