Having a bad credit rating can seriously delay your goals in life. It can limit opportunities and deny you of financial options. Yet, some simple steps can fix your credit and help you to keep your credit in good standing.
Credit Card
If your credit history has put you in the position where you are not able to obtain a regular credit card, you should try to get a secured credit card to begin rebuilding your credit. These accounts are much easier to get as you will have to fund the new account ahead of time with a deposit to cover any purchases. A new credit card, used responsibly, will help repair your credit rating.
If your credit card has a balance of over 50% of your limit, it should be your number one priority to pay it off until the balance is under 50%. Once your balance reaches 50%, your rating starts to really dip. At that point, it is ideal to pay off your cards altogether, but if not, try to spread out the debt.
If you do not want to pay too much, contact your creditors and tell them you will not pay on a interest rate that is astronomical. It is bordering on illegal for credit card companies to charge you skyrocketed interest rates. You did sign a contract and agree to pay interest. Be very wary of suing your creditors, especially if all of your issues were covered in the contract.
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You need to work with the companies from whom you have credit cards. By keeping the lines of communication open, you will avoid getting into more debt, making your credit score even worse. One way to tackle this problem is to call them and ask if you can have the due date or monthly charge amount changed.
Before you commit to a settlement, you should first determine exactly how the agreement will affect your credit. Some methods are less damaging than others; research them all before making an agreement with your creditor. Some creditors have no concern over how your credit score can be affected by entering into certain agreements. These people just want your money.
Dispute every error you identify on your credit report. Send an official letter to companies that have wrongfully lowered your score, and include documentation that shows the mistake. When you mail your dispute package, be sure to make arrangements for confirmation of receipt. In this way, you will have documentation that your information has been received.
Stop living beyond your means. You may have to overhaul your entire mindset when it comes to money. While you may see your peers racking up credit debt, be sure to not fall into the same trap. Instead of spending more than you can afford, take a long hard look at your income and expenses, and decide what you can really afford to spend.
Too many credit cards is a common cause of financial strain, so close all of your accounts aside from one. Transferring multiple balances to one single card is a way to gain control of your finances. This allows you to pay off one credit card bill rather than many smaller ones.
Try not to file for bankruptcy. The record of the bankruptcy appears on your report and affects your credit rating for up to 10 years. It may seem like the right things to do, but your future will be affected. If you choose to file bankruptcy, you’ll be unable to get a credit card or loan in the future.
Comb through all of the bills that you get! Make sure that all of your fees and charges are correct and that there are not any items that were not authorized by you. You should ensure everything is okay and does not have any errors.
When lenders are looking at your credit, an explanation that goes with the report generally will not even be looked at. The statement will only draw further attention to negative reports on your credit history.
Avoid using those credit cards. Try to make purchases using cash only. If you absolutely have no other choice but to use a credit card, pay off the balance in full as soon as possible.
Applying simple tips like the ones given in this article will help you solve your credit problems. A high credit rating is essential for most people, so learning about repairing your credit is hardly a waste of time.
