When trying to deal with everything that revolves around having poor credit, this can cause a great deal of stress. This can be especially frustrating when your credit mistakes are far in your past. Rebuilding credit may be challenging, but it is not impossible. This article will help you design a plan adapted to your situation.
The first thing you need to do before beginning to repair your credit is outline th steps required to do so, then follow those steps without deviation. Make a commitment to making better financial decisions. Don’t buy anything unless you absolutely need it. Before you open your wallet ask the questions “do I need this?” and “can I afford this?” If the answer is no to either, put it back on the shelf.
Credit Score
If your credit is good, it’s easy to get a mortgage on a new home. If you wish to have an even higher credit score, make sure that you pay your house mortgage off on time. Owning your own home also improves your credit score in the form of having large assets to borrow against. Having a home also makes you a safer credit risk when you are applying for loans.
Try opening an installment account. Make sure that you are able to afford the payments on any installment accounts that you open. A properly managed installment account will work wonders on your credit rating.
An important tip to consider when working to repair your credit is to work closely with your credit card companies. If you do this you will not go into debt more and make your situation worse than it was. Call them and see if you can change the payment terms. They may be willing to change the actual payment or move the due date.
Before you get into an agreement about settling a debt, make sure you understand how it’s going to affect your overall credit. Do some heavy researching before starting an agreement with any creditor; there are other options that may not damage your credit score as heavily. Creditors just want their money and really aren’t interested on how it will affect your score.
Credit Reporting
Find and challenge errors on your credit report using the dispute process offered by each credit reporting agency. Report any errors to the three credit reporting agencies. Be sure to include any documents to support your case. Include a request for a return receipt with the dispute package so that you can prove it was received by the appropriate agency.
One excellent way to get your credit score back up is to close all your credit cards except for one. Make necessary arrangements to set up payments, or transfer the balance to your remaining account. Paying off one main credit card will be easier than paying off several cheaper ones.
Taking time to examine your monthly credit card bill is critical to ensure that there are no errors. You must get in touch with your credit card issuer as soon as you spot an error to make sure that it is properly handled and does not result in any negative reporting.
Be certain to get any credit repayment plan in writing. Having the plan in writing will protect you if the creditor reneges on the plan or if your debt is transferred to another creditor. Once you finish making all your payments, be sure to send that information to the credit agencies in writing.
Try not to file for bankruptcy. It is noted on someone’s credit report for 10 years. It might seem like a good thing but you will be affected down the line. If you do file for bankruptcy, it will be extremely difficult to get approved for a loan or a credit card for many years, if ever.
Credit Cards
Pay the balances on all credit cards as soon as you can to start the credit improvement process. Pay down credit cards that have the highest amount owed, or the highest interest rates. Doing so shows your creditors that you are taking your debt problem seriously.
If you follow the advice in this article, you will be on the right track to rebuilding your credit score. Be consistent and be aware of your obligations. You can rebuild your credit; don’t spend your time worrying, spend it fixing your credit.