Being fully aware of past and current debt can help you control incurring new debt that cannot be managed. Now it is time to figure out how to resolve the problems and create a better future. The following advice is easy to follow and can help you repair your credit score.
If you have a card that carries a balance of over 50% of the limit, you should pay it down to below 50%. If your credit card balances exceed 50% of their limits, it will lower your credit score, so spread your debt over multiple cards, or better, pay down the balances.
The higher your credit score, the lower the interest rate that you can obtain will be. Lower interest rates mean lower payments, which allows you to pay off debt faster. Compare offers and choose the best interest rate you can find when borrowing money or subscribing to a credit card.
Getting an installment account can help you earn money and provide a boost to your credit. You have to keep a monthly minimum on an installment account, so make sure you open an account that you can afford. If you use one of these types of accounts, your score will quickly improve.
To start fixing your credit, you will have to pay your bills. However, it’s not enough to just pay your bills; you need to make your payments on time and in full. Getting rid of past-due bills will have a fast and dramatic effect on your credit score.
You should consider talking to directly with your creditors when you are trying to improve your credit. Maintaining contact shows your good faith and can help you minimize further debt. You can do this by speaking with them and asking to change the monthly charges or due date.
Before you get into an agreement about settling a debt, make sure you understand how it’s going to affect your overall credit. Some settlement agreements can actually be bad for your credit score, so be wary and do your homework. Most of the time they want their money and don’t care about your credit score.
If you see errors on your credit reports, dispute them with the credit 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.
Shut off all but one credit card if you want to fix your credit. You should arrange to make payments or make a balance transfer to your open account. This allows you to pay off one credit card bill rather than many smaller ones.
If you are able to get a payment plan worked out with any of your creditors, make sure you get the terms in writing. This way you have documentation of the agreement in case the creditor decides to change their mind or ownership of the company changes. When the debt is eventually paid or settled in full, you should request documentation of this and forward copies to the primary credit reporting companies.
For a better credit rating, lower the balances on your revolving accounts. Reducing the amount of debt you’re carrying is one of the best ways to improve your credit score. The Fair Isaac Corporation, FICO system tracks how much of your available credit you are using in 20 percent increments.
Only work with legitimate credit restoration companies. The credit repair industry does have its fair share of agencies that do not live up to their promises. Slimy operators are quite common, so beware of credit restoration scams. Be a smart consumer and educate yourself by researching user reviews online to find a good agency.
One of the biggest stressors can be bad dealings with debt collection agencies. Cease and desist documents can be used to hold back collection agencies, but only to stop harassment. You may be able to stop the deluge of calls from a collection agency, but the debt must still be dealt with.
When you need to repair your credit score, be wary of lawyers and law offices that advertise instant credit fixes. Some lawyers have chosen to take advantage of the people who have bad credit by charging a lot of money for things that are useless to their credit or are illegal. Investigate a lawyer before hiring them to help you in repairing your credit.
As you are now aware from this article, common sense is the prevailing wind that will sail you to better credit scores. If you follow this information, you can get to the ultimate goal.