Having poor credit can be a serious hindrance to moving forward with your life. It can make you feel like you are in debtors’ prison with no hope of escape. However, a few simple steps can be taken back in the direction of a good score.
The first step in repairing your credit is figuring out a plan that works for you, and sticking with it. However, if you are not prepared to alter bad habits regarding your spending, nothing will ever change. Pay cash for things, and cut out unnecessary expenses. Ask yourself if a certain purchase is both necessary and affordable. Buy the item if your answer to this question is “yes”.
Interest Rates
You can reduce your interest rate by maintaining a high credit score. Lower interest rates make paying bills easier, and prevents you from incurring debt. Take advantage of special offers and favorable interest rates to secure manageable credit payments and a good credit rating.
When looking to improve your credit, avoid companies claiming that they can remove negative information if the debt is true. All information remains on your credit report for a period of seven years or more. It is true, however, that you can remove inaccurate information from your report, but you do not need the assistance of a consultant to do so.
When you are trying to fix your credit record, call your creditors and make payment arrangements that will benefit both of you. If you do this you’ll find that your debt doesn’t increase and your credit is improved. This can be accomplished by negotiating with them for a change in due date or monthly charges.
Dispute any errors that you find on any of your credit reports. Include proof along with a letter disputing the claim to the agency that recorded the errors. Make sure that you ask for a return receipt so that you know your letter makes it to its intended destination.
Do not file for bankruptcy if you do not have to. It can adversely affect your credit for up to 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.
It is important to read all credit card statements you receive. Ensure that all of the listed charges are purchases that you made, keeping an eye out for fraudulent charges. You must be accountable for each item on your statement.
Attempts to defend negligence or bad credit will not succeed, even if they are justifiable. The creditors are only worried about results and numbers. It can actually backfire. It brings attention to a part of your report you would rather a lender not look at very closely.
You may get into the situation that you have multiple debts and you just don’t have enough money to pay them all. When you do have money to apply to your debt, spread it among all of the creditors so that each one gets a little. Even if you can only meet the minimum payment, you will avoid having the bill sent to collections.
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 helps prove to lenders that you’re credit worthy and responsible.
Threats are illegal. If a collection agency is treating you roughly, you could sue them. You are protected by law, and you need to know that.
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 contact them and are faithful in making your new payments you can often avoid being reported to the credit bureaus for late payments. 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.
One of easiest ways to keep your credit score high is to simply pay your monthly bills on time. Setting up a payment reminder will help you remember to send in that payment. There are a variety of ways to setup payment reminders. You can have your bank remind you, put them into your scheduling software, or even have your creditors remind you.
Put these ideas to use so you can repair your credit and stay on top of good credit practices. The time you invest educating yourself regarding credit repair is worth every minute.
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