Bad credit is one of the most irritating potential detours you can encounter on your journey through life. Bad credit makes it difficult to take advantage of any financial opportunities that arise. But, you can fix your credit in a few simple steps and protect it for the future.
If you have to improve your credit, make a solid plan and follow it. Making changes to become a wise spender means you have to make a budget and rules, then follow them. Only purchase something if you cannot live without it. Look at your purchases closely. If you cannot afford something, and you do not need it, do not buy it.
If your credit does not allow you to obtain new credit, getting a secured one is much easier and will help fix your credit. This card is very easy to get, because you put money into an account ahead of time and then spend from that, so the bank doesn’t have to worry about not getting their money. Using this card responsibly will improve your credit rating over time, and eventually you’ll be able to get a normal credit card again.
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%. You should keep your balances under fifty percent; anything over this and you can lower your credit rating, so spread out the money you own and pay down your credit cards.
Having a good record allow you to qualify for things like a home mortgage. Making your mortgage payment on time each month will also boost your credit score. Credit rating companies will judge you a reliable risk when you have verifiable assets such as a home. This will also be useful in the event that you end up needing to borrow funds.
When you want to rebuild your credit, take a close look at any negative reports that are harming your credit. If you notice a mistake on your report, you could get some items crossed off. Even if the item itself is right, an error in the date or amount gives you the right to contest it.
If your credit is poor, take the first step to repairing it by closing out the majority of your cards, leaving yourself just one to use. It is important to make small payments or transfer a balance to the open account. This way you can work on paying one credit card balance off, instead of a bunch of smaller ones.
Avoid bankruptcy at all costs. Bankruptcy does not drop from your credit report until ten years have passed, so you will deal with the fallout for a significant period of time. Although it sounds like an easy way to get rid of debt, it will affect your life for a significant amount of time. If you choose to file bankruptcy, you’ll be unable to get a credit card or loan in the future.
You will be able to keep up with your bills, and get a good credit score. Paying late is placed on your credit report which can hurt your chances of getting a loan.
Credit Score
Lowering the balances on any currently revolving accounts will increase your credit score. Your credit score can be raised if you lower your balances. When balances are 20, 40, 60, 80 and 100 percent of the total credit available, the FICO system takes note of it.
You should locate a good credit score improvement company to help you. The credit improvement industry does have its fair share of agencies that do not live up to their promises. Sadly, many people have fallen for credit repair scams. Take the time to read reviews of different agencies. This will allow you to find an honest one to work with.
Put your credit cards on lock down and don’t use them at all, if possible. Pay for everything you buy with cash instead. If you do use a credit card, pay the full balance each month.
Don’t believe the hype of lawyers or other offices that promise they can immediately fix your credit score. A lot of people are having difficulty with their credit, and there are lawyers that try to exploit these people with illegal and ineffective credit improvement services. Before you give a lawyer any money or any personal information, make sure to do a thorough check on them and their practice to make sure they are legitimate.
You should make an effort to pay off past due accounts and accounts that have gone to collection. These accounts will still appear on a credit report, but they will be earmarked as paid.
Having read these simple tips, the only thing left now is to apply them. The time you take to learn how to repair your credit is worth the trouble it saves you.
