Having a poor credit score is among the most frustrating situations that takes the fun out of life. It can limit your financial choices and keep you from taking part in good opportunities. Here are a few easy tips on how you can fix your credit and make sure it stays positive in the future.
Pay down the balance on any credit card that is 50% or more of the credit limit. If you let your balances get too high, your credit rating will drop significantly. You can either spread your debt out by transferring some of the balance to low interest cards, or better yet, pay off as much as you can.
Interest Rates
If your debt includes large amounts for interest charges contact the debt collector and see whether you can pay the original debt and avoid some of the additional interest charges. 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. You can consider suing your creditors if the interest rates are outrageously high.
One thing to watch out for when trying to fix your credit is scammers who say that they can get any negative information deleted from your credit, regardless of its accuracy. Bad marks on your report will not go away for seven years. It is possible to have erroneous information removed from your report, however.
Don’t attempt to fix your credit in a way that will result in you breaking any laws. Don’t buy into scams that suggest you create new credit files. This is illegal and you will most certainly get caught. The legal consequences are expensive, and you might be sentenced to jail.
Before you commit to a settlement, you should first determine exactly how the agreement will affect your credit. Some debt settlements are better than others. Do your homework and find out how your score will be impacted before agreeing to anything. Many collectors just want to get paid and don’t care about credit consequences.
When you want to rebuild your credit, take a close look at any negative reports that are harming your credit. Errors are not infrequent in credit reports. If you can prove the credit bureau is in the wrong, they should correct the reported error or remove it entirely.
Try joining a credit score if you’re still struggling to boost your credit rating by opening new lines of credit. They might be able to provide you with several more options at better rates than banks, since they work locally as opposed to nationally.
Start living within your means. This is nothing short of a lifestyle overhaul. In many cases, people are using credit cards to buy things they want, rather than focusing on things that they need. Review your budget and look at what you can spend each month without using more money than you have coming in.
Single Account
If you have bad credit, have your credit cards merged into one single account. It is important to make small payments or transfer a balance to the open account. This will let you focus on paying off a single account rather than many small ones.
Try not to file bankruptcy if at all possible. 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 seems like the wise thing to do at the time, it will bring you negative consequences in the long run. Most lenders will be hesitant to work with you in the future when a bankruptcy shows on your credit report.
These are ways of protecting your credit rating. Late payments to credit cards are reported to the major credit agencies and can hurt your chances for securing a new loan.
Easy tips, like the ones in this article, will help you repair your credit and keep it healthy in the future. The time you take to learn how to repair your credit is worth the trouble it saves you.