Your credit may have greatly suffered when you spent more money than you could actually afford or had to make ends meet in this poor economy. The good news is that there are some things that you can do to repair it.
Your low credit score will cut your interest rates. Doing this can reduce monthly payments, which will assist you in paying off any outstanding debts faster. Take advantage of special offers and favorable interest rates to secure manageable credit payments and a good credit rating.
Good credit scores allow you to take out loans, buy a house, and make other large purchases. Timely mortgage payments augment your credit score. Having a major asset like a house also looks good to potential creditors. If you have to borrow some money, you will need this.
Installment Account
If you make a decent income, consider an installment account when you want to give your credit score a boost. When opening an installment account, you need to make a monthly payment, so get something you can afford. If you are able to keep up with one of the accounts, you should see your credit score improving quickly.
If you don’t want to pay too much at a time, you can avoid paying higher interest rates than you started with. It is bordering on illegal for credit card companies to charge you skyrocketed interest rates. Remember that you agreed to pay that interest when you signed the contract. You need to be able to prove the interest rates are too high if you want to sue your lenders.
Never trust a business or person who offers to clear up your credit for a price. Especially if it is correct information they say they can remove. Regardless of their claims, these debts will stay on your report for seven years at a minimum. Be aware, however, that incorrect information can indeed be erased from your record.
Stay in touch with credit card companies if you wish to repair your score. If you do this you’ll find that your debt doesn’t increase and your credit is improved. Contact your credit card company and request to change your scheduled due date or interest rate.
Do not do things which could cause you to go to jail. There are plenty of credit scams that purport to erase your existing credit file and create a new one. This is illegal and you will eventually be caught. They may seem like a small matter, but if you get caught, you could receive heavy fines and even jail time.
If you find any errors on your credit report, you should dispute them. Send an official letter to companies that have wrongfully lowered your score, and include documentation that shows the mistake. Mail your dispute documents to the agency using certified mail and a return receipt so that you can prove the agency received them.
Taking time to examine your monthly credit card bill is critical to ensure that there are no errors. If there are late fees, you have to make sure that you take care of them immediately with the company so that they don’t send that information to the credit bureaus.
It is important to get any payment plan that you agreed to with a creditor in writing. This is for your protection. It allows you to have valid documentation of the terms in the event that a creditor reneges on its offer or changes owners. Once you make the final payment, get a statement that verifies that the debt has been satisfied and send it to the various credit reporting agencies.
If at all possible, avoid filing bankruptcy. This will reflect on your credit report for the next 10 years. Bankruptcy not only zeros out your debt, it also zeros out your credit score. If you do file for bankruptcy, it will be extremely difficult to get approved for a loan or a credit card for many years, if ever.
When you start fixing your credit, pay down balances on the credit cards as soon as you can. It is a toss up as far as which cards are best to pay off first – some choose ones with the highest interest rate, others choose the card with the lowest balance. This will show creditors that you are responsible with the cards.
When lenders examine your personal credit history, they will not consider any statements you have made about the negative marks. The basic reason for bad marks on credit is simple. You did not pay something you were supposed to pay. Lenders are often discouraged by people that make excuses for bad credit.
Avoid using credit cards. Pay for everything with cold, hard cash. If the purchase you’re buying is more than you can currently afford you can use a credit card, but pay it back as soon as possible.
Credit Score
Your credit score will get damaged each time you open another line of credit. Store credit cards can be tempting as they often offer discounts to you if you open one but they should be avoided so as not to clutter your credit report. Your good credit score will suffer a small dip each time you open a new account.
With some hard work and guidance, you can easily fix your damaged credit and help receive the rating that you deserve. Apply the tips you learned here and get started on your way to good credit.