Many people’s credit scores have suffered as a result of the economic downturn. You can use the information that is provided in this article to get a better credit score.
If you’re credit needs some work, first you should make a plan you can stick with, and then follow through. If you want to change then you have to work hard and stick with it. Only buy the things that are absolutely necessary. When considering a purchase, ask yourself if the purchase is necessary and affordable, if you answer yes to both, you should buy it.
Pay down the balance on any credit card that is 50% or more of the credit limit. 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 your credit is good, it’s easy to get a mortgage on a new home. When your mortgage is paid in full, you will be rewarded with increased scores on your credit file. Owning a home provides financial stability which is backed by your asset, the home, and as such, results in great credit. This will also be useful in the event that you end up needing to borrow funds.
If you want to boost your credit score and earn a decent living, open an installment account. It is necessary to at least pay the minimum, so insure the account is something that you can pay. Your FICO score will rise over time, if you responsibly manage this type of account.
Don’t get involved in anything that could get you arrested. The Internet is rife with many scams that will go into detail about creating yourself a brand new credit file and making the old one magically disappear. This is illegal and you will eventually be caught. You could end up owing a great deal of money or even facing jail time.
If you find any errors in your credit reports, you should dispute them. Contact the credit agency in writing, with documentation to support the errors that you are disputing. 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.
One excellent way to get your credit score back up is to close all your credit cards except for one. Then, try to arrange payments or transfer your balances to the one account you left open. It will be easier for you to make payments on a single credit card account, as opposed to several.
If you are able to get a payment plan worked out with any of your creditors, make sure you get the terms in writing. This will protect you should the company change its policies. As soon as you get it paid off, have that in writing so you are able to inform the credit reporting agencies.
Do everything you can to avoid bankruptcy. Bankruptcy can make getting credit almost impossible for many years. This may appear to be a wonderful idea where you rid yourself from all this debt at once, but in actuality it causes more harm than good. Bankruptcy destroys your ability to get any sort of loan for at least a few years, so don’t file unless you have to.
This helps you retain a proper credit status. Each time you make your payment late it will go against you.
If you go with a repair company to improve your credit score, be sure it is legitimate. There are far too many of these companies that are quite simply fraudulent. Many people fall victim to these scams every day. By reading user reviews online, you will be able to separate the good from the bad.
Credit cards should be avoided. Using cash will ensure that you stick to your budget and don’t overspend. When you do use a credit card, pay off the balance in full each month.
Collection Agencies
One of the most stressful aspects of handling bad credit is dealing with debt collection agencies. You can get a collection agency to cease and desist from harassing you but this does not discharge the debt. Even when the phone calls from collection agencies have stopped, the associated debts must still be paid.
Be aware that opening a new credit card account can affect your credit score in a negative way. Resist the urge to apply for credit cards while shopping at your favorite retailer, even if they offer tempting promotions. If you continue to increase your debt, your credit score will continue to drop.
Now that you know how to improve your credit score, why wait? Don’t let your credit score ruin your life; instead use this information to begin repairing the damage.