It is likely you have done something to damage your credit rating at some point in your life, whether it was a shopping spree, a predatory loan or just being a victim of bad economic luck. Luckily, there are some things you can do to make things better. Here are just a few of the ways you can do that.
Planning is the first step to repairing your credit. However, if you are not prepared to alter bad habits regarding your spending, nothing will ever change. Avoid buying what you don’t need. Put each potential purchase to the test: is it within your means and is it something that you really need?
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If your credit card is carrying more than half of its credit limit, your first priority should be paying it down until it is below 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.
One of the first steps of improving your credit score is ensuring that your bills are always paid. You should pay your bills in full each month. Do not let them fall behind again and get yourself in trouble. Getting rid of past-due bills will have a fast and dramatic effect on your credit score.
Make sure you do your research before deciding to go with a particular credit counselor. Although some credit counselors are truthful and legitimately helpful, other credit counselors are not honest and upfront with their motives. There are many scams out there. Smart consumers will always check to see that credit counseling agencies are, in fact, legitimate before working with them.
Do not involve yourself in illegal activities. Don’t buy into scams that suggest you create new credit files. It’s illegal to do this and you can get caught easily. Think of the legal costs and the possibility of doing hard time.
Contact your creditors to request a reduction in your credit line. Not only will this prevent you from owing more, but it will be reflected in your credit score because it shows that you are responsible with your credit.
Check any negative items on your reports carefully when you begin fixing your credit. The item may be essentially correct, but there may be an error someplace. If the date or amount, or some other thing is incorrect it may be possible to get the entire item removed.
If you find a mistake on your credit report, be sure to dispute it! Draft a dispute letter that will go to each credit rating agency that shows an error, and prepare any supporting documents. Include a request for a return receipt with the dispute package so that you can prove it was received by the appropriate agency.
Avoid spending more money than you make. This takes time and a change in attitude to accomplish. Unfortunately, easy credit has lured many people into buying luxuries that they don’t need and cannot afford, which will always catch up with them. Spend some significant time studying your finances, and set a realistic budget to which you can stick.
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Shut off all but one credit card if you want to fix your credit. Transfer credit card balances to one card for loan consolidation. By doing this you can make your bills more manageable. Instead of a mailbox full of credit card bills, you will only have one.
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 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 your debt, request appropriate documentation that confirms your zero balance.
Try not to file for bankruptcy. Bankruptcy can make getting credit almost impossible for many years. While ridding yourself of most debt may seem ideal, it is not without consequences. If you have filed for bankruptcy in the past, it can be near impossible to obtain a loan.
This helps you retain a proper credit status. Late payments are reported to all credit report companies and will greatly decrease your chances of being eligible for a loan.
It is important to read all credit card statements you receive. Make sure the charges on your credit cards are accurate. You are the only person that is responsible for making sure the statements are error free.
Restoring your credit rating looks at first like an uphill battle, but with sound effort and the right advice, that battle can be won. Use the information in this article to boost your credit score.
