You might have gotten sucked in by Capital One’s pre-approved credit offers, or maybe you got into some medical debt. In any of these cases, you likely hurt your credit at least a little. There are some things you can do to turn your credit around.
Pay down any credit cards with a balance in excess of 50%, preferably getting them down to 30%. If any of your balances climb past half of your available credit limit, pay them down or spread the debt around other accounts, otherwise, your credit rating gets tarnished.
Lower Interest Rates
When you have better credit, you will be offered lower interest rates on loans and credit cards. Lower interest rates make paying bills easier, and prevents you from incurring debt. Try to get the best offer and credit rates so you can increase your credit score.
A great credit score should allow you to get a mortgage on the house of your dreams. Paying down your mortgage improves your score as well. When you own your own home it shows that you have assets and financial stability. If you have to take out a loan, this will help you.
If you can afford to pay another monthly bill, an installment account paid on time will increase your credit rating. Open an installment account that you can pay for and make sure to keep an affordable monthly minimum on it. You might see a big improvement in your credit score, if you can handle an installment account responsibly.
Interest Rates
To avoid paying too much, you can refuse to pay off huge interest rates. Creditors are skirting aspects of the law when they hit you with high interest rates. On the other hand, you’re likely bound by a contractual agreement to pay any interest charged by lenders. 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.
When trying to rehabilitate your credit, it is important to work with each credit card company you are indebted to. If you do this you will not go into debt more and make your situation worse than it was. Talk to the company and see if you can change your due date or monthly fees.
Make sure you research a credit counselor before you visit them. Although some credit counselors are truthful and legitimately helpful, other credit counselors are not honest and upfront with their motives. Some credit services are nothing more than fly-by-night scams. Wise consumers always verify that credit counselors are legitimate before dealing with them.
If an action can result in imprisonment, draw the line. You should steer clear of internet programs that show you how to clear your credit. It’s illegal to do this and you can get caught easily. Think of the legal costs and the possibility of doing hard time.
Don’t sign a debt settlement contract until you know what impact it is going to have on your credit score. There are ways to go about this that will have less of an impact and should be learned about before you make any kind of deal with a creditor. The credit companies are looking at their own bottom line and are not concerned with your credit score.
Start living within your means. You need to change your way of thinking in this regard. In past years, people used good credit ratings to buy the items that they normally couldn’t afford, and they are now currently paying big payments. Be realistic about the lifestyle your income affords you.
If you are having problems retaining control of your charge habits, close all old accounts except for one. Transfer your balances to this one card, with the lowest interest, if this is possible. Doing this will allow you to focus on paying off one large credit card bill, instead of several smaller ones.
With some instruction and some hard work you can help your credit get back where it needs to be, so don’t be fooled by how hard it may seem. Put the information you just learned into practice and start repairing your credit today.