Your credit may have greatly suffered when you spent more money than you could actually afford or had to make ends meet in this poor economy. Fortunately, there are actions you can partake to reverse this.
Keep your credit card balances below 50 percent of your credit limit. Any time you exceed 50% of your credit limit, your credit rating is affected. Pay off credit cards as fast as you can, or spread the debt out further.
Lower Interest Rates
Maintaining a respectable credit score will enable you to obtain lower interest rates. Lower interest rates will reduce the amount of your monthly payment, and can also make it easier to repay your debt faster. Try to get the best offer and credit rates so you can increase your credit score.
Getting an installment account can help you earn money and provide a boost to your credit. When opening an installment account, you need to make a monthly payment, so get something you can afford. You will improve your credit score by properly managing an installment account.
Legitimate negative credit problems can not be easily wiped away from your credit rating, so be wary of companies that promise they can do so. All information remains on your credit report for a period of seven years or more. Be aware, however, that incorrect information can indeed be erased from your record.
Before using a credit counselor, it’s important to research them completely. Some counselors truly want to help you, while others are untrustworthy and have other motives. Also be aware that there are other credit counseling services run by dishonest people. These services are scams and should be avoided at any cost. If you’re smart, you’ll make sure the credit counselor is not a phony first.
Don’t sign a debt settlement contract until you know what impact it is going to have on your credit score. Some settlement agreements can actually be bad for your credit score, so be wary and do your homework. Some are out there just to take your money; they don’t care about your rating.
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. Always send your dispute letters certified mail, so that you can get return confirmation. This will give you proof that the agency received your dispute paperwork.
Live within your means. This may mean that you need to alter the way you have been thinking. In past years, people used good credit ratings to buy the items that they normally couldn’t afford, and they are now currently paying big payments. Be realistic about the lifestyle your income affords you.
It will be easier to increase your credit rating if you only have one open credit card account. It is important to make small payments or transfer a balance to the open account. Instead of paying several smaller credit card bills, you can work to pay off one credit card.
Do everything possible to avoid bankruptcy. This will have damaging consequences to your credit score for ten 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. You may never get a line of credit for any purchases you might need to make if you go ahead, give up on repairing your credit and file for bankruptcy.
Make sure that you pay more than the minimum balance owed on all of your credit cards to improve your credit. Start by paying the cards or accounts with the highest interest rates. It is your job to turn it around and prove your responsible with credit.
Lowering the balances on any currently revolving accounts will increase your credit score. Your credit score can be raised if you lower your balances. The FICO system makes a note to your credit report every time your account balance reaches a new 20% increment of your total available credit.
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. Sending the letter does not mean you no longer have to pay the bill, it only stops the collection agency from calling.
Nursing your credit back to good health is not as hard as it looks at first, especially when you are willing to make a persistent effort and listen to good advice. With the tips above, you are better prepared to take action and get your credit situation back where it should be.