It’s no surprise that there are so many people facing the hardships of bad credit today given the current state of the economy, yet don’t become discouraged because of this. Fortunately, these tips and tricks will provide useful insight into ways that you can work toward a healthier credit score.
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. If you don’t need something, don’t buy it. Put each potential purchase to the test: is it within your means and is it something that you really need?
Try to keep a balance of less than 50% of your available credit on all of your cards. If your credit card balances exceed 50% of their limits, it will lower your credit score, so spread your debt over multiple cards, or better, pay down the balances.
Avoid paying off high interest rates so that you don’t pay too much. An interest rate that is shockingly high can possibly be ruled as illegal in certain cases. You did however sign a contract that agrees you will pay off all interests as well as the debt. Your interest rates should be regarded as too high if you plan on suing your creditors.
When you’re looking to fix your credit, be cautious of credit improvement companies. They may tell you they can remove negative information, but if it’s correct, it can not be removed. This information can stay on your record for about seven years. However, information that is not correct can be removed.
When you are trying to fix your credit record, call your creditors and make payment arrangements that will benefit both of you. Avoid collection to improve your credit score. You can accomplish this by simply calling and asking them to change payment terms, like your interest rate or your billing date.
Contact your creditors and see if you can get them to lower your overall credit limit. This will prevent you from spending too much that you do not have. It will also show the credit companies how responsible you are, and if you do need to get more credit in the future, you will have a much easier time.
If you see errors on your credit reports, dispute them with the credit agency. Send a letter to all agencies involved. Include the errors you noted along with supporting documents that prove that the information on file is erroneous. Also include a request for a return receipt to make sure the agency gets it.
If at all possible, avoid filing bankruptcy. This will have damaging consequences to your credit score for ten years. Bankruptcy may sound great because your debt goes away but there are consequences. By filing for bankruptcy, you might have a lot of trouble getting a credit card or qualifying for a loan in the future.
The most obvious way to get your credit repair journey going is to pay down those pesky credit card balances. First work on the cards with the steepest balances or interest rates. By doing this, you will show your creditors that you are trustworthy with your credit.
Make sure to fully read every single credit card statement that you get. You are looking to see that every charge is correct and determining whether or not you are being charged for an item you didn’t buy. It’s up to you to make sure that every item on your bill is correct and dispute those that are not.
Having to deal with a collection agency can be extremely stressful. You can get a collection agency to cease and desist from harassing you but this does not discharge the debt. Letters such as these prevent calls from collections agencies, but the consumer must still pay the debts under dispute.
There are many law offices that promise quick credit fixes; avoid these. Because so many people these days suffer from credit problems, attorneys and scam artists have come up with ways to charge a high price for repair schemes that can be illegal and useless. Check up on the track record of any lawyer whose credit advice you intend to seek.
Part of a nasty credit crunch is having multiple debts that you do not have the money to pay. To make sure everyone gets a share, spread out your money distribution. Even making the monthly minimum payment will keep the creditors at bay, and stop them from hiring a collection agency.
Now you know how to repair your credit score, so get started on a plan of action. Low credit scores can adversely affect the actions you take in life so start now to begin increasing your credit rating.