Having bad credit can be stressful and annoying. It’s one of the main stumbling blocks to a successful life. Bad credit and keep you from great opportunities as they arise. There are a few things you can do to improve and protect your credit.
You may be able to get a secured credit card even if your poor credit has prevented you from getting other credit cards. Anyone can get one, but you must load money onto the card as a type of “collateral”. If you show a good history of payments with this card, it will help improve your credit standing.
Your low credit score will cut your interest rates. Doing this can reduce monthly payments, which will assist you in paying off any outstanding debts faster. Getting better interest rates leads to an easily maintainable good credit score.
When you have a good credit rating, you will be able to easily get a mortgage loan. Staying current with your mortgage payments is a way to raise your credit score even more. Owning your own home also improves your credit score in the form of having large assets to borrow against. Financial stability is important should you need a loan.
Call and request lower limits on your cards from the credit card companies. Not only will this stop you from overspending, it will indicate responsible behavior to a credit card company, and may enable you to get future credit.
When looking over your credit report, look closely at the negative report that are listed. If you find errors in any of the information, you might be able to request the entire negative record be removed from your credit report.
Too many credit cards is a common cause of financial strain, so close all of your accounts aside from one. Transfer your balances to this one card, with the lowest interest, if this is possible. It will be easier for you to make payments on a single credit card account, as opposed to several.
Check over your credit bill each month to make sure there are no errors. If there are mistakes, call the company. If the errors are not fixed, they could get reported to the major credit rating agencies.
Many times you and your creditor can work together to come up with a prepayment plan. If so, be sure you get a written agreement stating the terms. This is a great way to have documentation of the plan if the creditor changes their mind or the company ownership gets changed. After you have paid your debt, request appropriate documentation that confirms your zero balance.
Bankruptcy should be filed only if absolutely necessary. Bankruptcy will be noted on the credit report for 10 years, afterwards you must rebuild from scratch. Though the idea of ridding yourself of debt can sound appealing, the long term consequences just aren’t worth it. Bankruptcy destroys your ability to get any sort of loan for at least a few years, so don’t file unless you have to.
One of the most stressful things about poor credit is dealing with debt collection agencies. Debtors can stop harassment by collection agencies with cease and desist notices, but know that this is all they do. Remember, even when the debt collectors stop annoying you by phone, your obligation to pay what you owe is not alleviated.
Put these ideas to use so you can repair your credit and stay on top of good credit practices. It is always worth your time learning how to fix and maintain good credit, since it has a major impact on most of the larger financial deals you will make.