You might feel like you are being taken advantage of it you have bad credit. Debt acts as a constant reminder of the mistakes you’ve made. Fortunately, you can move on with your life and fix your credit by applying the following advice.
The first step to repairing your ailing credit is to create a manageable, feasible financial plan. Real changes come from commitment to healthy spending habits. Pay cash for things, and cut out unnecessary expenses. Put each potential purchase to the test: is it within your means and is it something that you really need?
Credit Score
A secured credit card might be a good option for the person with a poor credit score. 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. Limited spending and regular payments can turn a new credit account into a valuable credit score improvement tool.
It is easy to get a mortgage for a house if your credit score is good. Making your mortgage payment on time each month will also boost your credit score. Owning your own home gives you a significant asset to use in securing your finances, and your credit score will reflect that asset. If you have to take out a loan, this will help you.
Try to negotiate with your creditors about the amount of interest you’ll pay on an old debt. In many situations, exorbitant fees and penalties can be challenged. Although, in reality, you did agree in advance to pay any interest charges incurred. It is possible that you can sue a creditor and claim that the interest rate charged is unreasonably high.
Give your credit card company a call and ask them to lower your credit limit. It will pay off in lowering the risk of excessive borrowing and reflecting good financial decision making on your behalf.
Credit Card
Take a look at credit card bills to make sure that every item is one you have charged. If you notice unwarranted fees or surcharges, contact the credit card company to avoid being reported for failure to pay.
If you and your creditor decided to set up a payment plan, you should first get the details of the plan in written form. 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. Upon completion of payment, make sure to get the receipt in writing and send it to the credit reporting agencies.
Do everything you can to avoid filing bankruptcy. Doing so will reflect upon your credit score and report for 10 years. It can be tempting to just go ahead and file bankruptcy to get out from under the debt, but the detrimental effects can be long lasting. If you choose to file bankruptcy, you’ll be unable to get a credit card or loan in the future.
This is the first step toward having an A+ credit rating. Late payments to credit cards are reported to the major credit agencies and can hurt your chances for securing a new loan.
Carefully read all of your credit statements. Ensure that all of the listed charges are purchases that you made, keeping an eye out for fraudulent charges. You are responsible for the accuracy of information on your credit card statments.
Lenders do not care about the reason you have negative information on your credit report. Having some positive credit history is the only way that negative reports can be counteracted when lenders are analyzing your credit liability. The most it will do is draw more attention to the bad aspects of the report.
Collection Agencies
One of the most stressful aspects of handling bad credit is dealing with debt collection agencies. 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. You will still have to pay what you owe even if collection agencies stop calling you.
Be careful of paying for a service or a lawyer that advertises quick or instant credit score improvement, many of them are dishonest. Because so many people are experiencing credit problems due to the economy, shady lawyers that advertise useless, possibly illegal credit score improvement services have appeared. Prior to contacting any lawyer for help fixing your credit, investigate him or her thoroughly.
An unfavorable credit score can be brought about by multiple outstanding accounts and no means of settling those debts. Take out a little money for each one of the creditors that you owe. Even if it’s only minimum payments, send as much as you can to each creditor in order to avoid them sending your account off to collection agencies.
When your credit is in disrepair, it is quite easy to throw your hands up and think that things will never improve. Use the advice provided here and you soon will be making a change in your credit.
