Your credit can easily be damaged by careless shopping sprees, too many credit cards or by an unexpected financial emergency. There are some things you can do to turn your credit around.
If you’re credit needs some work, first you should make a plan you can stick with, and then follow through. If you want to change then you have to work hard and stick with it. Only the necessities can be purchased from here on in. Ask yourself whether every purchase is both affordable and necessary, and only buy if the answer to both questions is “yes”.
Look at the credit card accounts you have with a balance over 50% of the credit limit. Pay those off until they fall under this number. Your credit score can diminish with balances over 50%, so spread out the debt or pay off the credit cards.
If you do not want to pay too much, contact your creditors and tell them you will not pay on a interest rate that is astronomical. Creditors are skirting a fine line of law when they try to charge you exorbitant interest rates. However, you have entered into a legal agreement that requires you to pay accrued interest. You may wish to make a legal claim that the interest rate charged exceeded your state’s statutory limits.
When trying to improve bad credit, beware of companies who promise that they can erase any negative, but correct items, on your credit report. This information can stay on your record for about seven years. If the information is an error, the credit report can be corrected.
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. Credit card agents may have the authority to eliminate monthly charges, extend your due date or change your billing cycle.
Call each of your charge card companies and ask them to lower the limit on them. 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.
Before you decide to go through with a debt settlement, you should be sure you know how it will affect your credit. There are ways that are less damaging than others, that is why it is important to research about it before starting an agreement with creditors. Most of the time they want their money and don’t care about your credit score.
You should examine any negative entries on your credit report thoroughly if you want to fix your credit problems. Even though the particular credit item may not accurate, finding an error in the amount, date, or something else can cause the entire item to be stricken from your report.
Find and challenge errors on your credit report using the dispute process offered by each credit reporting agency. You should contact the credit bureaus both online and by certified letter; be sure to include proof of your claims. Send any correspondence by recorded mail to ensure proof of receipt by the agency.
Start living within your means. You will have to change your thought patterns in order to get your debt under control. In the not too distant past, credit was easy and people could stretch themselves too far, but now the economy is paying the price of those days. Take a hard honest look at your budget, and figure out what you can honestly afford to spend.
Too many credit cards is a common cause of financial strain, so close all of your accounts aside from one. Try to make a payment or transfer your balance to your open credit account. Doing so will allow you to pay off one individual debt rather than a multitude of lesser balances.
If you and a creditor agree on a payment plan, make sure the agreement is committed to paper. This is for your protection. It allows you to have valid documentation of the terms in the event that a creditor reneges on its offer or changes owners. As soon as you get it paid off, have that in writing so you are able to inform the credit reporting agencies.
When you start fixing your credit, pay down balances on the credit cards as soon as you can. Pay down credit cards that have the highest amount owed, or the highest interest rates. This can prove to creditors that you are serious about paying down your debt.
Lenders won’t bother to look at those statements and therefor they are a waste of your time. The most it will do is draw more attention to the bad aspects of the report.
Avoid using those credit cards. Pay for things with cash whenever possible. If you ever use a credit card, be sure to pay it all in full.
Having to deal with a collection agency can be extremely stressful. Consumers can try to use a cease and desist letter if an agency is harassing them, but their usefulness is limited. The consumer still has to pay disputed debts even though these letters stop agencies from calling.
It goes without saying that if your credit is poor and needs repairing, you need to start from the bottom and build. Prepaid credit cards offer a risk and worry free opportunity to slowly increase your credit score. By doing this you will be proving to potential lenders you are credit worthy and capable of paying money when you are required.
Be aware that opening a new credit card account can affect your credit score in a negative way. When you are at the checkout, resist the urge to open a new store credit card. After you open new credit, you will see your score drop.
Getting your credit in line is probably an area of stress for you. Guidance you get from this article can turn that stress into pleasure. With the tips above, you are better prepared to take action and get your credit situation back where it should be.