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. Fortunately, there are quite a few ways that you can remedy your credit situation.
Pay down any credit cards with a balance in excess of 50%, preferably getting them down to 30%. If any of your balances climb past half of your available credit limit, pay them down or spread the debt around other accounts, otherwise, your credit rating gets tarnished.
When you have a good credit rating, you will be able to easily get a mortgage loan. Making your mortgage payment on time each month will also boost your credit score. When you are a home owner you will be financially stable based on what you own. This will be very helpful if the time comes where you need to take out a loan.
Credit Counselors
Before you hire a credit counselor, make sure that you have done your research. Although some credit counselors are truthful and legitimately helpful, other credit counselors are not honest and upfront with their motives. Some are not legitimate. You should always find out if a credit counselor is the real thing.
Give your credit card company a call and ask them to lower the limit on your credit card. It will pay off in lowering the risk of excessive borrowing and reflecting good financial decision making on your behalf.
Before you agree to any sort of repayment plan to settle your debts, consider how this will affect your credit score. Some methods will be less damaging than others, and you need to research them all before signing an agreements with a creditor. Some debt settlement companies are only after profits and do not communicate the likely consequences of their methods.
Joining a credit union can give you opportunities to increase your credit score. Credit unions often offer better interest and more options than chain banks do.
If your credit is poor, take the first step to repairing it by closing out the majority of your cards, leaving yourself just one to use. You may be able to transfer balances to your remaining account. By doing this, you can concentrate on a single credit card payment, as opposed to a lot of smaller ones each month.
If you are able to successfully negotiate a payment schedule for a debt, it is important to request a copy of the agreement in writing. This provides you with documentation that an agreement is in place in case the company changes hands or the creditor tries to change the terms of the agreement. After you have paid the debt off completely, keep your receipt in case there are any discrepancies on your credit report.
Take the time to carefully go over your monthly credit card statement. Make sure that all of your fees and charges are correct and that there are not any items that were not authorized by you. If an error occurs, you should immediately notify your creditor.
Collection Agencies
Collection agencies are stressful to deal with. Make sure you know that cease and desists of any type can only stop you from being harassed, you’re still going to be in debt. Even when the phone calls from collection agencies have stopped, the associated debts must still be paid.
Having a lot of debts that you cannot pay is part of having bad credit sometimes. When you do have money to apply to your debt, spread it among all of the creditors so that each one gets a little. A small part payment is always going to be preferable to those you owe money to than no payments at all. By making regular contributions to your debts, you should be able to keep the collection agencies at bay.
Repairing your credit isn’t something you can do overnight, but the best way to fix it is to slowly raise it back up. Prepaid credit cards can help you to break bad spending and repayment habits. This shows lenders that making payments is a priority for you, and that they should lend to you.
Credit Card
Your credit rating will also suffer from opening new lines of credit. When offered large discounts or incentives for opening a new credit card, politely reject the offer. Once you open a new credit card, your credit score will become lower.
Come up with a way to pay off any existing unpaid debts. Though they will still be reflected on all three credit reports, they will show as paid so the ill effects are less substantial.
If a company or collector threatens you, take a record of it because it is illegal. You are protected by law, and you need to know that.
If you are having problems working out a budget, or adhering to it, contact a credit counseling service and seek help as soon as possible. Often, these organizations can work with your creditors to work out an appropriate repayment plan and can help you focus on improving your finances over time. Good credit counseling can help you understand the best, easiest ways to oversee your finances and pay your financial obligations.
If you want to fix your credit it can seem like a lot to handle, if you work hard you can do it the right way. With the tips above, you are better prepared to take action and get your credit situation back where it should be.
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