If you had kept a record of who you owed money to then perhaps your debt could have been avoided. There is no better time than now to work on repairing past mistakes that can be adversely affecting your credit rating. The following advice is easy to put into practice, so read it and then put it to use.
The first step to repairing your ailing credit is to create a manageable, feasible financial plan. Be totally committed to changing your spending habits. Limit your purchases only to things that are absolutely necessary. Ask yourself whether every purchase is both affordable and necessary, and only buy if the answer to both questions is “yes”.
Credit Card
If you need a credit card to aid in fixing your credit but you cannot obtain one due to the state of your credit, applying for a secured credit card is an option. Most likely, you will not have a problem obtaining this type of card, but you must add funds to the account before you make any purchases to assure the bank that you will pay. If you open a credit card account, keep charges fairly low, and pay it on time, this will go towards improving your credit score.
When you’re looking to fix your credit, be cautious of credit restoration 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. You can erase information that is incorrect from your credit record.
You can work with the credit card companies to start repairing your credit. By keeping the lines of communication open, you will avoid getting into more debt, making your credit score even worse. Politely ask if it is possible to have your minimum monthly payment adjusted or due date changed.
Before you agree to enter a debt settlement, learn about what happens to your credit as a result of it. There are methods that are going to be less damaging than another, and all should be researched before you enter an agreement with a creditor. The creditor is only interested in receiving the money due, and is not concerned with your credit score.
Take the necessary steps to fix any mistakes that you see on your credit reports by filing an official dispute. 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.
Do not spend more than you can afford. This takes time and a change in attitude to accomplish. Unfortunately, credit has been easier to get than ever. Many people are buying things that are unaffordable and end up paying more than they should for any item. You should look at what you can afford to spend, before using credit for purchases.
You should look at your credit card bill every month to make sure it is correct. if you find any, then you need to get in touch with the company right away so this does not become a blemish on your credit record.
Any time you establish any payment plan with any creditor, make sure you get it in writing. This way you have documentation of the agreement in case the creditor decides to change their mind or ownership of the company changes. After you have paid off your debt, send proof of this to the major credit agencies.
Avoid filing for bankruptcy. The record of the bankruptcy appears on your report and affects your credit rating for up to 10 years. You may think that bankruptcy is your only option to rid yourself from debt, however look at your long term financial goals before deciding to file for it. If you have filed for bankruptcy in the past, it can be near impossible to obtain a loan.
Making your payments on time shows lenders that you are serious about maintaining good credit. Every time you pay late it is put on your credit report and will hurt you if you ever need a loan taken out.
Credit Score
Make sure the credit improvement agency is reputable. There are a number of shady operators in the credit score improvement business that can cost you money and do nothing for you. Sadly, many people have fallen for credit score repair scams. You can separate the scam artists from the good agencies by relying on user reviews found online.
Avoid using your credit cards at all. Use cash to pay for things whenever possible. If you have no choice but to use a credit card, always pay the balance in full each month.
Collection Agencies
Dealing with a debt collection agency is one of the most traumatic parts of a financial crisis. Consumers can legally issue letters to collection agencies to cease and desist if they are being harassed. These letters will discourage contact from collection agencies. You may be able to stop the deluge of calls from a collection agency, but the debt must still be dealt with.
A terrible credit situation would be having many different debts you can’t afford to pay back. Spread your money among your creditors so that they each get a part of what funds are available. A small part payment is always going to be preferable to those you owe money to than no payments at all. By making regular contributions to your debts, you should be able to keep the collection agencies at bay.
As should now be apparent, most of what’s required to get you out of debt in order to salvage your credit is simply common sense. Using this easily-understood information can help you reach your goal.
This is a limited-time offer. We are not able to guarantee availability if you wait!
