Having poor credit can be a devastating occurrence in life. A bad credit score will make it hard for you to get a loan or apply for housing, among other things. Here are a few easy tips on how you can fix your credit and make sure it stays positive in the future.
If you are unable to get a new card because of your bad credit, try to apply for secured cards. These are extremely easy to qualify for. A secured credit card looks just like a regular card, and works like a regular card, but you have to have the necessary money in an account to guarantee payment. Even though this card will be secured by your own money, you will make payments and manage it as if it were unsecured. This will improve your credit as you show yourself able to make the payments on time.
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Any of your credit cards with balances that are above 50% of your overall limit need to be paid off as soon as possible, until the balance is less than 50%. 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.
If you want to avoid paying a lot, you can pay off debts that have a huge interest rate. Creditors who charge exorbitant interest may be just a law suit away from having to wipe the slate clean. Your initial agreement likely included a commitment to pay interest. It is possible that you can sue a creditor and claim that the interest rate charged is unreasonably high.
Repairing your credit is actually pretty simple. The first step is to focus on paying your late bills. More importantly, you need to start paying your bills in full and on time. Your FICO score will begin to increase immediately after you pay the bills that are past due.
When you are trying to clear up your credit contact your credit companies. This will enable you to make sure to keep your credit in good standing and repair any damage that may have been caused. Talk to the company and see if you can change your due date or monthly fees.
Call each of your charge card companies and ask them to lower the limit on them. Not only will this stop you from overspending, it will indicate responsible behavior to a credit card company, and may enable you to get future credit.
Credit Unions
Credit unions are an option for those who have run out of options. Credit unions focus more on the local situation instead of the national one, and may provide more options or rates that are more favorable than those of a larger bank.
Do everything you can to avoid filing bankruptcy. This will reflect on your credit report for the next 10 years. Although it seems like the wise thing to do at the time, it will bring you negative consequences in the long run. You may not qualify for auto financing or a credit card after filing for bankruptcy protection.
To increase your credit score lower the amount owed on revolving accounts. By lowering your credit card balances, you will be able to improve your credit score. The FICO system has a new level for every twenty percentage points of your credit available.
If you are having a lot of trouble with your credit, consider locking up your credit cards for a while. Try to use cash instead for all of your purchases and bills. If you absolutely need to use a credit card, be prepared to pay off the balance at the end of the month or as soon as possible.
Do not trust anyone who promises you miracle results. Due to the large number of people experiencing credit difficulties, predatory lawyers have sprung up who charge big fees for credit restoration services that are either useless or illegal. Make sure any credit repair service you consider has a positive standing with the BBB.
If you have suffered job losses due to the economy, you may not have the cash to pay all the debts you owe. Make sure you pay all your creditors instead of limiting it to just a few. Even a minimal payment can satisfy your creditors and keep your accounts from landing in collections.
Good credit starts with rebuilding. Using a prepaid credit card will help to build your credit score, without the worry of late payments, and bad marks on your credit report. This will make you appear responsible to future potential lenders.
Credit Score
Every time you open a new line of credit your credit score is going to suffer. Resist the urge to apply for credit cards while shopping at your favorite retailer, even if they offer tempting promotions. You credit score is going to drop immediately after opening that new line of credit.
If you apply these tips, you should be able to improve your credit and maintain a good score. The time you invest learning about ways to repair credit can be fruitful in improving your credit rating.
