Bad credit is a particularly troublesome life problem that can haunt you for years. A low score will close the doors on many financial options and stop you from being able to make your own choices in life. Read on for some ways to fix your credit and reclaim your life.
Planning is the first step to repairing your credit. You must make a commitment to making changes on how you spend money. Stick to the essentials, and avoid frivolous purchases at all costs. Ask yourself how necessary each purchase is, and how affordable it is too. If you can’t answer “yes” to each of the questions above, you need to reconsider the purchase.
Pay down the balance on any credit card that is 50% or more of the credit limit. Credit card balances are among the factors taken into account when determining your credit score. Maintaining balances over 50% will lower your rating. You can attain lower your balances by using balance transfers to move debt from accounts with higher balances to those with lower balances, or by simply paying off some of your higher balances.
Interest Rate
If you find that you have a credit card and the interest rate has gotten to high, you do have the option to not pay the debt, though there will be consequences. An interest rate that is shockingly high can possibly be ruled as illegal in certain cases. However, you did sign an agreement to pay the interest. Be very wary of suing your creditors, especially if all of your issues were covered in the contract.
If you want to fix your credit avoid companies claiming they can remove all of your issues, even those properly reported. Bad marks on your report will not go away for seven years. Items that you can get taken off your record are those that have been reported incorrectly or unfairly.
Credit improvement requires that you begin paying your bills. You should pay your bills in full each month. Do not let them fall behind again and get yourself in trouble. This will improve your credit score. The score rises as soon as you start making some headway on your overdue bills.
You can work with the credit card companies to start repairing your credit. If you do this you will not go into debt more and make your situation worse than it was. Don’t be afraid to ask for alterations in interest rates or dates of payment.
Before consulting a counselor for credit improvement, do your research. While many counselors are reputable and exist to offer real help, some do have ulterior motives. Some will try to cheat you. A wise consumer will find out if the credit counselors they deal with are legitimate or not.
Make sure to have as low as possible of a credit line available to you. 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.
The first step in repairing your credit involves a thorough and careful check to ensure your credit report doesn’t contain erroneous information. Although a certain credit item may not have any error, finding a mistake corresponding to a date or an amount can have the same item taken out of your report.
Start living within your means. This will require a change in your thinking. In the last decade, it has been way to easy for people to get credit. Many people have used this credit to buy items that they really could not afford at the time, and are now paying the price. Examine your budget, and figure out how much extra money you have to shop with.
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 give you important documentation in case of an ownership change or if the creditor tries to back out of the agreement. Upon completion of payment, make sure to get the receipt in writing and send it to the credit reporting agencies.
If you apply these tips, you should be able to improve your credit and maintain a good score. The time you invest educating yourself regarding credit restoration is worth every minute.
