Debts that you may have forgotten about or been unaware of can seriously hurt your credit. But now it is time to go into damage control mode and repair your credit. Follow this advice to improve your credit score quickly.
Credit Score
If you can’t get a normal card due to low credit score, look into a secured card. Most people are able to get this type of card, but you will have to load it up with a prepaid amount of money, as a guarantee that you can pay any charges that you make. A responsibly used new credit card will begin healing your credit score.
When you have a good credit rating, you will be able to easily get a mortgage loan. Paying mortgage notes on time will keep your credit scores high. The more equity you have in your home, the more stability the banks see in you. Having a good credit score is important if you need to take out a loan.
Installment Account
Think about getting an installment account to save money and improve your credit score. Choose an installment account you can afford, since you will have to leave a certain amount of money on it at all times. Your FICO score will rise over time, if you responsibly manage this type of account.
Avoid paying off high interest rates so that you don’t pay too much. If you are being charged a distressingly high interest rate, you may be able to talk to your creditor. It is important to take into account the fact that you did sign a contract and agreed to pay off the attached interest. Suing your creditors can be effective in some circumstances in cases where the court considers the interest rates to be excessive.
One of the first steps of improving your credit score is ensuring that your bills are always paid. More specifically, pay them on time and in full. Your credit score starts to improve immediately upon paying off some of your past due bills.
You need to carefully scrutinize credit counselors before you consult them for help with repairing your credit. Many may have ulterior motives, so make sure you are not being duped. Other options are clearly scams. A savvy consumer will always do his or her research on any credit counseling service to ensure that the agency is legitimate.
Do not do anything that will make you end up in jail. Scams abound on the internet that show you how to change your credit file. This tactic is not legal, and you face serious repercussions if you are caught. You could end up owing a great deal of money or even facing jail time.
If you are trying to improve your credit score but are having difficulty gaining access to new credit in order to do so, join a credit union. Local credit unions might have different credit products than national banks, because they can focus on local market conditions.
Officially dispute any errors you find on your credit reports. Send a letter to all agencies involved. Include the errors you noted along with supporting documents that prove that the information on file is erroneous. Mail your dispute documents to the agency using certified mail and a return receipt so that you can prove the agency received them.
Credit Card Balances
The most obvious way to get your credit restoration journey going is to pay down those pesky credit card balances. First, pay down your credit card balances, starting with the highest interest. This can prove to creditors that you are serious about paying down your debt.
This is one of the quickest way to create and maintain a credible financial record. 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.
For a better credit rating, lower the balances on your revolving accounts. By lowering your credit card balances, you will be able to improve your credit score. When balances reach anywhere from 20-100% of your available credit balances (in 20% intervals), the FICO system will make a note.
You probably noticed that in order to repair your credit score, you really need to use common sense. Following these simple steps and credit repair will no longer be a distant dream.