Getting off track with your credit can have a negative impact on your life’s path. It can make you feel like you are in debtors’ prison with no hope of escape. But a few easy steps can help you repair your credit and guard it in the future.
The first thing you should do when trying to improve your credit is develop an effective plan and make a commitment to adhere to it. You must be willing to implement changes and stick with them. Limit your purchases only to things that are absolutely necessary. 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.
When your credit is so bad that you can’t get a ‘regular’ credit card, a secured one will help you to repair your credit. Most people are able to get this type of card, but you will have to load it up with a prepaid amount of money, as a guarantee that you can pay any charges that you make. If you get a new card and use it responsibly, it will help to improve your credit score.
Installment Account
Try opening an installment account. You should make sure it is an installment account that you will be able to pay into every month. Paying on time and maintaining a balance will help improve your credit score.
Excessive interest rates can be contested. However, it is best not to sign contracts containing them in the first place. It is important to know the terms of your original agreement for the debt you incurred. Usually if you agreed to the terms the terms will be upheld as legal. If you believe the charges are excessive and your debtor will not negotiate down the interest and other additional charges, state laws might provide you with additional avenues to pursue a reduction in these charges. Federal law provides that when you are billed by a collection company the fees and interest cannot exceed the amount of the original debt. Your initial agreement likely included a commitment to pay interest. If you choose to bring a lawsuit against your creditors, use the high interest rates against them.
Give the credit card companies a call and find out if they will lower your credit limit. This will prevent you from spending too much that you do not have. It will also show the credit companies how responsible you are, and if you do need to get more credit in the future, you will have a much easier time.
One excellent way to get your credit score back up is to close all your credit cards except for one. You will want to either transfer your balances onto the one remaining card or set up payment arrangements, but close the account to new charges. This way you can work on paying one credit card balance off, instead of a bunch of smaller ones.
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 will protect you should the company change its policies. As soon as you get it paid off, have that in writing so you are able to inform the credit reporting agencies.
Try not to file for bankruptcy. The fact that you filed for bankruptcy is noted in your credit report and will stay there for 10 years. While ridding yourself of most debt may seem ideal, it is not without consequences. Once bankruptcy has been filed, it could permanently halt your chances of ever obtaining credit again in the future.
Begin the process of credit improvement by trying to pay down your credit card balances as fast as you can. Pay off high-interest debt first, as it grows the fastest. Your debt will not grow as fast as before, if you get rid of high interest rates first, and your creditors will see you are making efforts.
Take the time to carefully go over your monthly credit card statement. You will need to read over every charge on your account to check that it is accurate. It is only your responsibility to make sure everything is correct and error free.
For a better credit rating, lower the balances on your revolving accounts. Paying off your balances will have a perceptible positive impact on your credit score. The FICO system notates when a balance on a card is at 20,40,60,80, and 100 percent of the total available credit.
When working with a credit score improvement agency, it is imperative to find one that is legitimate. There are a number of agencies out there that are really not that helpful. There are many people who have been the victim of a credit improvement scam. Reading online reviews will help you to choose a decent credit repair company.
When lenders examine your personal credit history, they will not consider any statements you have made about the negative marks. If anything, it will just hurt you as it will draw attention to the negative event.
These tips will help you on your way. You can repair your credit issues and enjoy a brighter, more financially sound future. The time you invest educating yourself regarding credit repair is worth every minute.
