With so many people suffering hardships, such as job loss and higher living expenses, that make it difficult to survive, it comes as no surprise that so many have poor credit scores. The following tips will give you great information on how you can go about improving your credit score.
If you can’t get a normal card due to low credit score, look into a secured card. In order to get the card, you will have to fund the account as sort of an insurance that shows the bank your debts are going to be paid. If you use a credit card well, your credit rating will begin rising.
You may be able to reduce interest rates by maintaining a favorable credit rating. It will lower your monthly payments, so your debt will be taken care of at a much quicker rate. Get a good offer along with good rates, and you’ll have credit that you can pay off easily, and improve your credit score.
If you want to avoid paying a lot, you can pay off debts that have a huge interest rate. Creditors are skirting aspects of the law when they hit you with high interest rates. However, you signed a contract agreeing to pay off interests. Be very wary of suing your creditors, especially if all of your issues were covered in the contract.
Make sure to have as low as possible of a credit line available to you. Doing this keeps you from overtaxing yourself. It also shows the lending company that you are responsible.
Credit Card
Close all your credit cards except for one as a means of repairing your credit. You can make arrangements to pay the balances, or transfer the balances of your closed credit card accounts to your single remaining credit card. Instead of paying several smaller credit card bills, you can work to pay off one credit card.
Go over your monthly credit card statements to check for mistakes. If such fees are present, you need to get in touch with the credit card company right away to avoid adverse action.
If you wheel and deal and get a new payment plan, be certain to have it on paper. This is for your protection. It allows you to have valid documentation of the terms in the event that a creditor reneges on its offer or changes owners. After you have paid the debt off completely, keep your receipt in case there are any discrepancies on your credit report.
Pay off any balances as soon as you can. No matter what the balances are on your credit cards, pay down the highest interest rate cards first. This builds the positive credit history that creditors like to see.
Making your payments on time shows lenders that you are serious about maintaining good credit. Each late payment that you make shows on your personal credit report and can hurt you when the time comes to take out a loan.
If you want a higher credit rating, you will need to bring down the balance on any existing accounts. You can improve your score by lowering your balances. When balances reach anywhere from 20-100% of your available credit balances (in 20% intervals), the FICO system will make a note.
Avoid using those credit cards. Purchase with cash. If you ever use a credit card, be sure to pay it all in full.
Collection Agencies
Debt collection agencies can be the most stressful part of a bad credit crisis. You can submit a cease and desist statement to a creditor to stop harassment. These letters stop collection agencies that harassing debtors, but they don’t erase liability for the debt itself.
Having a lot of debts that you cannot pay is part of having bad credit sometimes. When you do have money to apply to your debt, spread it among all of the creditors so that each one gets a little. Even if you can only meet the minimum payment, you will avoid having the bill sent to collections.
Put together a plan to pay off the collection account and past due accounts. When these accounts get paid off, they are still on your credit history, but they are then marked as paid, which is far less damaging to your score.
Threats are illegal. If a collection agency is treating you roughly, you could sue them. Laws such as the FDCPA exist to stop debt collectors from harassing debtors.
Eliminate your debt. When creditors are assessing your risk, they want to see a high income to debt ratio. If your debt is high in relation to your income, creditors see you as a risky customer. It’s hard to pay off debt right away, so you need to come up with a plan and not deviate from it.
It is important to document all of your communications with credit bureaus while you try to clear your credit report of inaccurate information. Keep track of the interactions you have with everyone, including emails, letters or phone calls. Send any letters via certified mail so that you have a record of it being delivered.
There is no reason to put off starting to repair your credit now that you’ve learned how to do so. You should take action before your credit gets worst, at least to slow down the process.
