It doesn’t matter whether you fell victim to people giving out free credit cards, spent too much money or was hit very hard with the recession. Chances are that your credit has been damaged. You can reverse the effects of these actions though.
If you have credit that is not high enough for you to obtain a new credit line, sign up for a secured card. With a secured card, you have to fund your account before you use the card so that the bank will be assured that you will pay off your debts. If you get a new card and use it responsibly, it will help to improve 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 you owe more than half of your credit limit on any credit card, this will have a negative impact on your rating. Plan to pay down that card as soon as possible, or see about transferring some of that debt.
Credit Score
You can get better interest rates on credit cards and loans when you have a good credit score. This should make your monthly payments easier and allow you to pay off your debt much quicker. Obtaining the best possible interest rate saves you money, and helps you maintain your credit score.
If you can afford to pay another monthly bill, an installment account paid on time will increase your credit rating. When opening an installment account, you need to make a monthly payment, so get something you can afford. You will improve your credit score by properly managing an installment account.
To avoid paying too much, you can refuse to pay off huge interest rates. In most cases, creditors are somewhat limited in the amount of interest they can charge. Your initial agreement likely included a commitment to pay interest. The only way you are legally able to sue the creditors is if you are able to prove that your interest rates are much too high.
Begin paying your bills to repair your credit. You need to pay your bills off on time; this is very important. Once you have started to pay towards your past-due accounts, you credit score will gradually improve.
Before consulting a counselor for credit restoration, do your research. There are some counselors that are real, while others are basically scammers. Some are not legitimate. If you’re smart, you’ll make sure the credit counselor is not a phony first.
Avoid credit schemes that will get you in trouble. Don’t buy into scams that suggest you create new credit files. Needless to say, this is against the law and you are likely to get caught. The legal proceedings will be costly, and you may even be sent to jail.
Credit Union
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. With help from a credit union you might get better rates than at another bank, since credit unions better understand the current area compared to the national situation.
Take a look at credit card bills to make sure that every item is one you have charged. Immediately report any errors to your credit card company to prevent a bad mark on your credit report.
It is important to get any payment plan that you agreed to with a creditor in writing. If the creditor tries to change the agreement or if it the company is sold to someone else, you will have documentation to support your case. 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.
While it can be hard to just let the negative reports go, the statement will not be considered when lenders look at your credit history. It is possible that this can be detrimental by drawing closer scrutiny to your report.
It can be stressful to try and figure out how to improve your credit, but if you keep at it, you can make things better and see the results you want. Utilize the above information to start the journey of improving your credit score.