No matter what your current situation, you have probably damaged your credit by opening one too many credit cards or being affected by the economic downturn. Luckily, there are some things you can do to make things better. Here are just a few of the ways you can do that.
If you are unable to get an unsecured credit card due to your low credit rating, consider a secured card to help reestablish your rating. Secured credit card applications have a high rate of approval because you must fund a security deposit against your credit limit. If you utilize a credit card responsibly, it can aid in the repair of your credit rating.
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. Carrying a balance of more than half your credit limit negatively impacts your credit score. Either pay this balance down or spread it out over multiple cards.
Do not fall for the false claims many have about their ability to fix your credit. The claim that they can remove accurate debts from your credit report is false. Negative entries that are otherwise accurate will stay on your credit report for a minimum of seven years. If there is incorrect, negative information, you can get it removed.
Some sound advice to follow, is to be sure to take the time to contact your credit card company and work with them. This will help you stabilize your situation and start working towards a better financial situation. It is perfectly appropriate to call and request an adjustment to your interest rate or to push back a payment date if needed.
Before you choose a credit counseling agency, find out more about them. While some counselors are legitimate, offering genuinely helpful services, others have ulterior motives. Some companies you may find are outright scams. Smart consumers will always check to see that credit counseling agencies are, in fact, legitimate before working with them.
Don’t attempt to fix your credit in a way that will result in you breaking any laws. There are scams all over the web that teach you how to create a new credit file. Needless to say, this is against the law and you are likely to get caught. The end result of getting caught during the crime could be expensive legal fees and a possibility of time behind bars.
Call each of your charge card companies and ask them to lower the limit on them. This is likely to keep you from overusing credit, which can be a financial burden. It also lets credit card companies know that you are responsible, and this makes them more likely to extend credit to you as time goes on.
Try to pay down all of your debts until you’re only carrying a balance on one. You may be able to transfer balances to your remaining account. This allows you to pay off one credit card bill rather than many smaller ones.
If a creditor agrees to give you a payment plan, get that payment plan in writing. This will give you important documentation in case of an ownership change or if the creditor tries to back out of the agreement. Once you make the final payment, get a statement that verifies that the debt has been satisfied and send it to the various credit reporting agencies.
Go through all the statements you receive. Take a second look to make sure that you are being charged only for what you actually purchased. Do not trust the credit card companies to have your back, guarantee you do not pay debt that is not yours yourself.
To accomplish getting a better rating on your credit, pay down the balances of your current accounts. Simply lowering the balances on your open credit accounts can give quite a boost to your credit scores. The FICO system notes when balances are at 100, 80, 60, 40 and 20 percent of your total credit available.
You may want to argue against the reports, but potential lenders will not take your statements into consideration. In fact, it could actually make matters worse by bringing to their notice the negative aspects of your report.
Debt collectors are an intimidating and stressful part of dealing with bad credit. Remember that when dealing with harassing collection agencies, consumers have the option to issue a cease and desist letter to stop the harassment. They can prevent collectors from continuing to call a debtor, but they do not excuse the debtor from his or her outstanding financial obligations.
If you are threatened by a collection agency or debt collector, make a note of it, as what they are doing is illegal. Laws such as the FDCPA exist to stop debt collectors from harassing debtors.
If you foresee that you will have problems making your monthly payment, contact your creditors immediately. In many situations, a creditor is going to be willing to work with you. As an additional benefit, this can lessen the financial strain on you so that you may focus on the accounts that do not have repayment plans available.
Reduce your debt. Creditors compare the proportion of your debt to your total income. You will be looked at as a bad credit risk if your debt is too much for your income to handle. Most people can not immediately pay off debt, so it is best to make a plan and stick to it.
If you are determined and ready to learn, you can fix your credit in no time. Put the information you just learned into practice and start repairing your credit today.