Bad credit is an unfortunate detour on the road of life. A low score will close the doors on many financial options and stop you from being able to make your own choices in life. However, it is possible to fix your current credit problems and take steps to protect your future credit rating.
The first step in repairing your credit is figuring out a plan that works for you, and sticking with it. Be totally committed to changing your spending habits. Be sure to buy only the things that you need. When considering a purchase, ask yourself if the purchase is necessary and affordable, if you answer yes to both, you should buy it.
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. These things are, generally, on your record for seven years. You can erase information that is incorrect from your credit record.
If you have credit cards with a utilization level over 50%, then pay them down until they are below 50% utilization. Creditors like to see you using your accounts, but still keeping your balances under 50% of your allotted credit.
One of the first steps of improving your credit score is ensuring that your bills are always paid. You should always make an effort to pay your bills on time and in full. Getting rid of past-due bills will have a fast and dramatic effect on your credit score.
Credit counselors should always be researched thoroughly before being consulted for credit repair. While many counselors are reputable and exist to offer real help, some do have ulterior motives. Some companies you may find are outright scams. It is smart to verify the legitimacy of credit counselors prior to getting involved with them.
Paying off any debts you have that have high interest rates can help you to avoid paying too much. If you are being charged a distressingly high interest rate, you may be able to talk to your creditor. However, you agreed to pay the interests off when you signed the contract. Your interest rates should be regarded as too high if you plan on suing your creditors.
Make sure to have as low as possible of a credit line available to you. Doing this keeps you from overtaxing yourself. It also shows the lending company that you are responsible.
Before you agree to settle your debt, you need to know how your credit will stand afterwards. Do some heavy researching before starting an agreement with any creditor; there are other options that may not damage your credit score as heavily. Some debt settlement companies are only after profits and do not communicate the likely consequences of their methods.
If you are attempting to raise your score with the credit bureaus, but are encountering road blocks whenever you apply for new credit, then open an account with a credit union. They have opportunities that other banks can’t match since they are local, and don’t have to follow some of the same regulations.
If you are trying to repair your credit, check all of your negative reports very carefully. The debt itself may be legitimate, but if you find errors in its metadata (e.g. the date, amount, creditor name), you might be able to get the whole entry deleted.
It is crucial that you review credit card bills on a monthly basis to check for errors. If there are mistakes, call the company. If the errors are not fixed, they could get reported to the major credit rating agencies.
It is important to get any payment plan that you agreed to with a creditor in writing. You need to have a contract in writing so if the creditor goes belly up or they change your terms, you can catch them on it. As soon as you get it paid off, have that in writing so you are able to inform the credit reporting agencies.
Try not to file for bankruptcy. When you file for bankruptcy it shows for 10 years, your credit report will suffer from this. Though the idea of ridding yourself of debt can sound appealing, the long term consequences just aren’t worth it. You may not qualify for auto financing or a credit card after filing for bankruptcy protection.
Too many credit cards is a common cause of financial strain, so close all of your accounts aside from one. You can make arrangements to pay the balances, or transfer the balances of your closed credit card accounts to your single remaining credit card. It is much easier to manage one large monthly payment than it is to keep track of multiple smaller ones.
You need to read and understand the credit card statements you receive in the mail. Always check to make sure that you are being charged correctly, and not being double charged or charged for items that you did not buy. Do not trust the credit card companies to have your back, guarantee you do not pay debt that is not yours yourself.
If you want a higher credit rating, you will need to bring down the balance on any existing accounts. Maintaining smaller balances can improve your credit rating. When balances are 20, 40, 60, 80 and 100 percent of the total credit available, the FICO system takes note of it.
Try not to file bankruptcy if at all possible. This will show up on your credit for around 10 years. While ridding yourself of most debt may seem ideal, it is not without consequences. It may be impossible for you to get a loan or credit card in the future if you file for bankruptcy.
Make sure that the credit improvement agency you choose to work with is reputable. There are lots of disreputable credit improvement agencies out there. Lots of people get taken in by scammers. See if the company in question has a reputation on any of the user review sites before you commence business with them.
Put these ideas to use so you can repair your credit and stay on top of good credit practices. Time learning how to repair your credit, means a great future with many transactions since you will have a good score.