It is likely you have done something to damage your credit rating at some point in your life, whether it was a shopping spree, a predatory loan or just being a victim of bad economic luck. Fortunately, there are actions you can partake to reverse this.
The first step in repairing your credit is figuring out a plan that works for you, and sticking with it. If you want to change then you have to work hard and stick with it. Only buy what you absolutely need. Put each potential purchase to the test: is it within your means and is it something that you really need?
Pay down the balance on any credit card that is 50% or more of the credit limit. If you have a balance that is more than 50 percent, your credit score will drop. If you can, pay the balances on your cards; if not, do your best to pay as much as possible each month.
You may be able to reduce interest rates by maintaining a favorable credit rating. You’ll be able to make your payments more easily and get your debt paid off quickly. The key to paid off credit is to find a great offer and a competitive rate so that you can pay off your debt and get a better credit score.
Credit Score
Having a good record allow you to qualify for things like a home mortgage. Making mortgage payments in a timely manner helps raise your credit score even more. Owning your own home also improves your credit score in the form of having large assets to borrow against. Having a home also makes you a safer credit risk when you are applying for loans.
In order to make sure that you do not overpay, know that you can dispute your really high interest rates. Creditors trying to charge more from you than what they originally loaned you plus a reasonable amount of interest are usually willing to negotiate. Your initial agreement likely included a commitment to pay interest. Be very wary of suing your creditors, especially if all of your issues were covered in the contract.
Credit Card
Take the time to ensure each month’s credit card bill is correct. You must get in touch with your credit card issuer as soon as you spot an error to make sure that it is properly handled and does not result in any negative reporting.
It is important to get any payment plan that you agreed to with a creditor in writing. If the creditor tries to change the agreement or if it the company is sold to someone else, you will have documentation to support your case. Upon completion of payment, make sure to get the receipt in writing and send it to the credit reporting agencies.
Bankruptcy should be a last resort. Doing so will reflect upon your credit score and report for 10 years. This may appear to be a wonderful idea where you rid yourself from all this debt at once, but in actuality it causes more harm than good. 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.
Try lowering the balance of any revolving accounts you have. By lowering your credit card balances, you will be able to improve your credit score. The Fair Isaac Corporation, FICO system tracks how much of your available credit you are using in 20 percent increments.
Although they mean a lot to you, these statements are often set aside when lenders go over your credit history. 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.
Your credit cards are not doing you any favors; avoid using them. Stick to your budget by only spending the cash that you have allocated for spending. 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.
Collection Agencies
One of the biggest stressors can be bad dealings with debt collection agencies. A consumer had the option of making use of cease and desist statements to persuade collection agencies, but remember that C&D statements only prevent them from harassing you. These letters may prevent collection agencies from making phone calls, but the consumer remains responsible for paying the debt.
It’s especially painful to have a lot of different debts that you can’t pay all at once. Divide your money between your creditors so every one gets paid. 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.
Start using credit again in order to repair damage caused by previous negative activity. Prepaid credit cards offer a risk and worry free opportunity to slowly increase your credit score. Potential lenders will be sure to see that you can be relied upon and are worthy of credit.
Credit Score
Opening too many lines of credit negatively affects your credit score. It may be tempting to get a new account when there are bonuses offered at the check out, but you should stop and think about it first. If you fall for the temptation, your credit score will drop when opening that new card.
Record any debt collector who makes threats towards you because this is illegal. You should be aware of the laws that safeguard consumers’ rights when dealing with debt collectors.
If you are experiencing difficulties paying your monthly expenses, you should get in touch with your creditors right away to develop other payment plans. 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 help you get some breathing room. It can also help you pay the bills where you aren’t able to negotiate a different payment plan.
Although it can seem daunting, you can get your credit on the mend by learning about it and taking the proper steps. Use the information gleaned from this article to fix your credit and improve your life.
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