Different Ways You Can Have Better Credit

There are millions of bad credit scores out there today. It’s no surprise, not with a poor economy, rising living costs, stagnant wages, and a nasty employment market. Follow these tips if you need a better credit score.

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. If you let your balances get too high, your credit rating will drop significantly. You can either spread your debt out by transferring some of the balance to low interest cards, or better yet, pay off as much as you can.

Opening up an installment account will help you get a better credit score and make it easier for you to live. You are required to meet a monthly minimum, so be sure that you can make the payments. You can quickly improve your score by successfully managing these accounts.

When you’re looking to fix your credit, be cautious of credit score repair companies. They may tell you they can remove negative information, but if it’s correct, it can not be removed. This information can stay on your record for about seven years. However, information that is not correct can be removed.

You should consider talking to directly with your creditors when you are trying to improve your credit. By doing this, you will keep your credit from getting worse by making sure that your debt does not increase. Some of your options include negotiating for a later due date, and asking for reductions in your minimum monthly payments.

Credit Counseling

Before you choose a credit counseling agency, find out more about them. Although some can be quite legitimate, others have motives that are less than kind. Also be aware that there are other credit counseling services run by dishonest people. These services are scams and should be avoided at any cost. Smart consumers make sure that a credit counselor is legit before starting to exchange any money or sensitive information.

You can contact your creditors and request a lower limit. It will pay off in lowering the risk of excessive borrowing and reflecting good financial decision making on your behalf.

Officially dispute any errors you find on your credit reports. You should compose a letter to the agencies that have made the errors, and provide proof that you are correct. Include a request for a return receipt with the dispute package so that you can prove it was received by the appropriate agency.

If you are currently spending more than you earn, you need to quit that immediately. You need to change your thinking to consider your future goals, not just buy all of the things you want right now. Unfortunately, easy credit has lured many people into buying luxuries that they don’t need and cannot afford, which will always catch up with them. It is important to look closely at your finances and see what you can actually afford and what you can not.

Always get a plan in writing if you are going to do a payment plan that deals with creditors. This way you have documentation of the agreement in case the creditor decides to change their mind or ownership of the company changes. You also want it in writing if it gets paid off so you can go ahead and send it to credit reporting agencies.

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 makes a note to your credit report every time your account balance reaches a new 20% increment of your total available credit.

Unfortunately, no financier is going to be interested in the statement you provide when they are examining your credit history. The statement will only draw further attention to negative reports on your credit history.

Collection Agencies

One of the most stressful aspects of handling bad credit is dealing with debt collection agencies. Remember that when dealing with harassing collection agencies, consumers have the option to issue a cease and desist letter to stop the harassment. Even when the phone calls from collection agencies have stopped, the associated debts must still be paid.

Be careful of paying for a service or a lawyer that advertises quick or instant credit score improvement, many of them are dishonest. A lot of people are having difficulty with their credit, and there are lawyers that try to exploit these people with illegal and ineffective credit repair services. Do a thorough background check on any lawyer advertising credit restoration services before handing over any money.

You may get into the situation that you have multiple debts and you just don’t have enough money to pay them all. Try to divide all your available money between your creditors, so you can pay everyone at least something. Even if all you’re making is minimum payments, this will keep you out of collections.

It goes without saying that if your credit is poor and needs repairing, you need to start from the bottom and build. Consider a card that requires payment in advance; this will improve your score without the risk of failure. Potential lenders will be sure to see that you can be relied upon and are worthy of credit.

Now that you know how to improve your credit score, why wait? Use this information to prevent your credit rating from falling and to gradually raise it so that you can avoid it affecting your life negatively.