Developing a low credit score is easy to do, but difficult to remedy, leading to financial barriers that are hard to surmount. A bad credit report closes doors to financial options and opportunities. That said, it is possible to restore your credit to its former glory and prevent it from being wrecked again.
Credit Cards
Start by paying off credit cards with accounts 50% over your limit. You can concentrate on another card once these accounts are lowered to under half of your limit. Your credit score can diminish with balances over 50%, so spread out the debt or pay off the credit cards.
Opening up an installment account will help you get a better credit score and make it easier for you to live. With this sort of an account, you need to keep a minimum. If you use one of these types of accounts, your score will quickly improve.
Paying your bills is a straightforward, but truly vital prerequisite for credit score repair. Your bills must be paid completely and on time. As soon as you start paying off your bills so that they are not late, your credit score will immediately start going up.
You need to work with the companies from whom you have credit cards. This will help you stabilize your situation and start working towards a better financial situation. Call them and see if you can change the payment terms. They may be willing to change the actual payment or move the due date.
Make sure to have as low as possible of a credit line available to you. It will pay off in lowering the risk of excessive borrowing and reflecting good financial decision making on your behalf.
Take a look at your credit report if you have a bad score. If you notice a mistake on your report, you could get some items crossed off. Even if the item itself is right, an error in the date or amount gives you the right to contest it.
If you find any errors in your credit reports, you should dispute them. Draft a letter to reporting agencies disputing negative entries and also submit any available documentation. Ask for a return receipt so that you can prove that the agency got your package.
If you are having problems retaining control of your charge habits, close all old accounts except for one. Call your credit card company and try to work out a repayment plan, or transfer the balances of multiple cards to one lower interest card. It is much easier to manage one large monthly payment than it is to keep track of multiple smaller ones.
Look through your credit card statement each month and make sure that it is correct. You don’t want them reporting these to the credit reporting companies, so you’ll need to contact them immediately if there are.
If you and your creditor decided to set up a payment plan, you should first get the details of the plan in written form. Having documentation is important for your records but also protects you in case a creditor changes their mind. After you have paid the debt off completely, keep your receipt in case there are any discrepancies on your credit report.
Bankruptcy should only be viewed as a last resort option. This will reflect on your credit report for the next 10 years. Bankruptcy may sound great because your debt goes away but there are consequences. You may not qualify for auto financing or a credit card after filing for bankruptcy protection.
Make sure that you pay more than the minimum balance owed on all of your credit cards to improve your credit. First work on the cards with the steepest balances or interest rates. It is your job to turn it around and prove your responsible with credit.
This is to keep your credit in good standing. 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.
Carefully read the small print on your statements. You will need to read over every charge on your account to check that it is accurate. It is only your responsibility to make sure everything is correct and error free.
Revolving Accounts
Lowering the balances on revolving accounts can help you to get a better credit score. Maintaining smaller balances can improve your credit rating. Your FICO credit score notes what your balances are on your revolving accounts based on the credit you have available.
Avoid using your credit cards whenever possible. Using cash will ensure that you stick to your budget and don’t overspend. If you have no choice but to use a credit card, always pay the balance in full each month.
Following these simple tips can help you get on the road to repairing your credit and keeping it healthy. The time you take to learn how to repair your credit is worth the trouble it saves you.
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