Bad credit is one of the most irritating potential detours you can encounter on your journey through life. It can cause you to miss some great opportunities and take away some financial options. That said, it is possible to restore your credit to its former glory and prevent it from being wrecked again.
A secured credit card might be a good option for the person with a poor credit score. With a secured card, you have to fund your account before you use the card so that the bank will be assured that you will pay off your debts. If you use a credit card well, your credit rating will begin rising.
Pay down the balance on any credit card that is 50% or more of the credit 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.
A lower credit score can get you a lower interest rate. Lower interest rates make it much easier and quicker to pay off balances. Try to get the best offer and credit rates so you can increase your credit score.
Never trust a business or person who offers to clear up your credit for a price. Especially if it is correct information they say they can remove. If the information is correct, it will remain as part of your report, in most cases, for seven years. It is true, however, that you can remove inaccurate information from your report, but you do not need the assistance of a consultant to do so.
Check your credit card carefully each month to ensure that there’s no incorrect information. If you notice unwarranted fees or surcharges, contact the credit card company to avoid being reported for failure to pay.
It is important to get any payment plan that you agreed to with a creditor in writing. 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. Once the debt is fully paid, you need to get a statement verifying this from the creditor and send it to each of the major credit bureaus.
If you need to repair your credit score, you should pay your credit card balances as fast as possible. Pay down your cards that have the highest interest and largest balances first. Doing so shows your creditors that you are taking your debt problem seriously.
Paying your credit cards on time keeps you in good standing on your credit report. Whenever you fail to make your payments on time, your credit report is affected negatively. This can make it very difficult for you to take out a loan in the future.
To earn a higher credit score, keep revolving account balances low. Paying off your balances will have a perceptible positive impact on your credit score. The FICO system notes when balances are at 100, 80, 60, 40 and 20 percent of your total credit available.
You should locate a good credit improvement company to help you. There are lots of disreputable credit score improvement agencies out there. Lots of people have been taken in by credit improvement schemes. If you read enough reviews, you can find out which ones are good and which are bad.
Statements like these will only be ignored, so it’s not worth the trouble. In fact, it could actually make matters worse by bringing to their notice the negative aspects of your report.
Avoid using your credit cards at all. Cash payments are preferable. If you absolutely have no other choice but to use a credit card, pay off the balance in full as soon as possible.
Be very careful about credit professionals who state that they could fix your credit quickly. Due to the huge amount of people with credit problems, lawyers have emerged and offer to repair credit for a huge fee, and most of the “repair” is illegal or useless. Do a thorough background check on any lawyer advertising credit score repair services before handing over any money.
Determine a way that you can settle all overdue accounts using affordable time payments. Although these accounts won’t be expunged from your credit report, they will reflect the fact that you have paid them in full, and the problems you have encountered as a result of having unpaid debts on your report will be reduced or eliminated.
Be sure to document any threats that are made by a creditor or collection agency, since these are illegal. Even if you are in debt, you still have rights.
Paying all of your bills in a timely manner is a vital component of determining your credit score. Sign up for payment reminders to make sure you remember to make payments. You can do this in a number of ways. Set it up using your online banking account and have emails sent to yourself. Another way is to use text messages to remind you of a certain payment you need to make.
Having read these simple tips, the only thing left now is to apply them. Because a good credit rating is important in so many financial transactions, the time you spend learning about credit restoration is well-spent.