There are millions of bad credit scores out there today. It’s no surprise, not with a poor economy, rising living costs, stagnant wages, and a nasty employment market. These tips will help you get a healthier score.
The first step to repairing your ailing credit is to create a manageable, feasible financial plan. Unfortunately, the way that you approach spending money will probably have to be revamped. Purchase nothing but the essentials. When considering a purchase, ask yourself if the purchase is necessary and affordable, if you answer yes to both, you should buy it.
If your credit does not allow you to obtain new credit, getting a secured one is much easier and will help fix your credit. You are more likely to be approved for this type of card because, once funded, the banks feels secure that you will pay them back. If you open a credit card account, keep charges fairly low, and pay it on time, this will go towards improving your credit score.
Credit Card
If your credit card is carrying more than half of its credit limit, your first priority should be paying it down until it is below 50%. Any balances that are over half your limit drag your credit rating down. So be sure to pay your credit card down or, if you can not, try to use another credit card.
In order to start repairing your credit, you need to start paying your bills. More precisely, you must begin paying your bills fully and on time. Your credit score starts to improve immediately upon paying off some of your past due bills.
Do not try something that you do not know is legal or illegal. There are less than honest entities that will show you how to make a brand new credit file. You will be prosecuted, it is against the law. Legal ramifications can cost a lot, and you may go to jail.
Call your credit card companies and request that they lower your limit on your cards. 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.
Dispute any errors that are on your credit report so they are removed. Contact the credit agency in writing, with documentation to support the errors that you are disputing. Make sure when you send the dispute package that you request proof by signature that it was received.
Credit Card
The first step in credit score improvement is to close all but one of your credit accounts as soon as possible. You can transfer all of your balances to one credit card, ensuring you choose the one with the lowest interest rate. This way you can work on paying one credit card balance off, instead of a bunch of smaller ones.
To even begin improving your credit you will need to lower the balance owed on them as soon as possible. You should first work on paying down the credit cards with the highest balance or interest rates. It is your job to turn it around and prove your responsible with credit.
Try lowering the balance of any revolving accounts you have. By lowering your credit card balances, you will be able to improve your credit score. The FICO system will make a note when the balances are at 20, 40, 60, 80 and 100 percent of the total credit available.
Collection Agencies
One of the biggest stressors can be bad dealings with debt collection agencies. You can use a cease and desist letter to stop any harassment from collection agencies. A letter like this may stop a collection agency from harassing you, but you are still on the hook to pay your debts.
Part of a nasty credit crunch is having multiple debts that you do not have the money to pay. Spread your money among your creditors so that they each get a part of what funds are available. Even if you can only meet the minimum payment, you will avoid having the bill sent to collections.
Now that you know various ways to repair your credit, why should you wait to use them? Don’t let poor credit affect your life any longer. Use the tips presented here to repair you score and your overall financial health.
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