Having a bad credit score may cause problems for you, if you want to apply for new credit or do business with many companies. Unfortunately, negative credit can limit the things you’re able to do and can determine many things in your future. However, you can take steps towards credit restoration, in which case, more doors will open, instead of close. Follow the tips and information below to get started cleaning up your credit.
Try to get a secured credit card if you are not eligible for an unsecured card. This will help you fix your credit. You will most likely be approved for this type of card, but you will have to add money to the card before you can use it so the bank will know that you can pay for all of your purchases. Using this new credit card in a responsible manner will help to build back up your good credit rating.
Any credit cards that have balances over 50% of your limit should be paid off until they are less than 50% of your limit. If you let your balances get too high, your credit rating will drop significantly. You can either spread your debt out by transferring some of the balance to low interest cards, or better yet, pay off as much as you can.
When trying to rehabilitate your credit, it is important to work with each credit card company you are indebted to. Avoid collection to improve your credit score. You can do this by speaking with them and asking to change the monthly charges or due date.
Always do research before contracting a credit counselor. Many may have ulterior motives, so make sure you are not being duped. 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. Wise consumers always verify that credit counselors are legitimate before dealing with them.
Joining a credit union can give you opportunities to increase your credit score. They have opportunities that other banks can’t match since they are local, and don’t have to follow some of the same regulations.
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. Your letter should be sent with a request for return receipt, so you can have a record that it was received by the reporting agency.
If you are currently spending more than you earn, you need to quit that immediately. You need to change your way of thinking in this regard. 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. Take a deep look at your finances, and determine what you can realistically afford to spend.
Though it is hard to make this step, consider paring down the number of credit lines to just one; this will sometimes improve your credit score. Make necessary arrangements to set up payments, or transfer the balance to your remaining account. This way you can work on paying one credit card balance off, instead of a bunch of smaller ones.
If a creditor agrees to give you a payment plan, get that payment plan in writing. This is a great way to have documentation of the plan if the creditor changes their mind or the company ownership gets changed. Every time you get a debt paid off, ask the company to notify the credit bureaus.
Paying your credit cards on time keeps you in good standing on your credit report. Late payments affect your credit report. Also late payments might prevent you from obtaining a loan should you need it in the future.
You may want to argue against the reports, but potential lenders will not take your statements into consideration. Inclusion of the defending statement could actually have the opposite effect as it brings more attention to the fact that you have a negative mark on your report.
Fix your credit problems today to give yourself a happy financial future. When it comes to fixing your credit, you do have options, many of which will not cost you anything. Take advantage of the tips provided and start working your way to a great credit rating now.