No matter what your current situation, you have probably damaged your credit by opening one too many credit cards or being affected by the economic downturn. Luckily, there here are some steps that you can take to turn things around.
Develop a plan that works if you are in need of credit score improvement. You have to be committed to making real changes to your spending habits. If you don’t need something, don’t buy it. Ask yourself whether every purchase is both affordable and necessary, and only buy if the answer to both questions is “yes”.
Any of your credit cards with balances that are above 50% of your overall limit need to be paid off as soon as possible, until the balance is less than 50%. When your debt is over 50%, credit ratings usually go down. With that said, try to spread out the debt that you have or try paying it off.
Lower Interest Rates
When you have better credit, you will be offered lower interest rates on loans and credit cards. Lower interest rates mean lower payments, which allows you to pay off debt faster. Receiving competitive credit rates and good offers are important in having credit that you can pay off easily, and that will get you a great credit score.
If your credit is good, it’s easy to get a mortgage on a new home. Timely mortgage payments augment your credit score. Owning a home provides financial stability which is backed by your asset, the home, and as such, results in great credit. A good credit score is necessary when you need to take out a loan.
If you can afford to pay another monthly bill, an installment account paid on time will increase your credit rating. You are required to meet a monthly minimum, so be sure that you can make the payments. You can quickly improve your score by successfully managing these accounts.
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. Some companies that charge high interest rates are running the risk of having those rates challenged by consumers. However, you signed a contract agreeing to pay off interests. It is likely you can have exorbitant interest rates reduced if you sue the creditor.
A good tip is to work with the credit card company when you are in the process of repairing your credit. This will help you stabilize your situation and start working towards a better financial situation. Don’t be afraid to ask for alterations in interest rates or dates of payment.
Give the credit card companies a call and find out if they will lower your credit limit. It will keep you from overextending yourself financially, it sends a great signal to the credit card companies that you are a responsible borrower, and you will have an easier time getting credit in the future.
One way to increase your credit score is to become a member at a credit union. Credit unions sometimes have better rates and more options for your credit rather than a large bank. You can base this on how well the economy is in your area instead of the national situation.
Officially dispute any errors you find on your credit reports. You should contact the credit bureaus both online and by certified letter; be sure to include proof of your claims. Make sure that you send the letter via recorded delivery, so that you can prove that the credit agency receives it.
When you start fixing your credit, pay down balances on the credit cards as soon as you can. First, pay down your credit card balances, starting with the highest interest. This will show responsibility to creditors.
Doing this will ensure that you keep a solid credit score. Every late payment appears on a credit report, and could potentially hurt your chances at a loan.
Go through all the statements you receive. Ensure that all of the listed charges are purchases that you made, keeping an eye out for fraudulent charges. You should ensure everything is okay and does not have any errors.
Credit Restoration Company
Look for a credit restoration company that has good reviews online and is legitimate. There are a number of agencies out there that are really not that helpful. Many people have fallen for scams involving credit restoration. Reading online reviews will help you to choose a decent credit restoration company.
Avoid using your credit cards whenever possible. Use cash when you need to buy something. If you do use a credit card, pay the full balance each month.
Build your credit back up to repair it. Prepaid credit cards can be a good way to raise your FICO score, away from the dangers of late fees or charges for exceeding your credit limit. You will prove to creditors that you can pay your bills.
At first, it may seem impossible to repair your damaged credit. However, with some effort and the right advice, you can start to improve your credit rating and eventually regain a credit score that will instill faith in any lender. Utilize the above information to start the journey of improving your credit score.