Do you hate your life because your credit sucks? These days, many people have had tough financial challenges that have killed their credit score. Thankfully, bad credit isn’t forever. Use these tips to learn how to repair your credit once and for all.
When your credit is so bad that you can’t get a ‘regular’ credit card, a secured one will help you to repair your credit. 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. Responsible use of a credit card can help rebuild your credit.
If you have credit cards with a utilization level over 50%, then pay them down until they are below 50% utilization. Once your balance reaches 50%, your rating starts to really dip. At that point, it is ideal to pay off your cards altogether, but if not, try to spread out the debt.
Credit Card
An important tip to consider when working to repair your credit is to work closely with your credit card companies. This will keep you from increasing the amount of debt that you have. Credit card agents may have the authority to eliminate monthly charges, extend your due date or change your billing cycle.
Don’t attempt to fix your credit in a way that will result in you breaking any laws. The Internet is rife with many scams that will go into detail about creating yourself a brand new credit file and making the old one magically disappear. That is illegal and you are going to be caught. The end result of getting caught during the crime could be expensive legal fees and a possibility of time behind bars.
Credit Score
Before agreeing on settling a debt, find out how if the process will raise or lower your credit score. Some agreements won’t hurt you as much as others. This is why you should research all of the available ones for you before signing an agreement. They do not care about the effects of what they do to your credit score and are just in it for the money.
If getting a new line of credit is vital to your credit improvement efforts, look into joining a credit union. Credit unions often offer better interest and more options than chain banks do.
If you see any erroneous information on your credit report, file a dispute so you can have the information removed. Report any errors to the three credit reporting agencies. Be sure to include any documents to support your case. Send your dispute package with a return receipt request so that you have proof that it was received by the agency.
A first step in fixing your credit is to close all credit card accounts that are unnecessary. Aim to only have one account. You can transfer all of your balances to one credit card, ensuring you choose the one with the lowest interest rate. It is much easier to manage one large monthly payment than it is to keep track of multiple smaller ones.
Interest Rate
One of your main tasks in credit improvement is paying off your cards as fast as you can. Sort your credit cards by balance and interest rate with the highest first. Then determine which credit card is the highest either in balance or interest rate and start to pay it off first. Beginning to pay your credit card balances off will show creditors that you are making a valiant effort and are credit worthy.
For a better credit rating, lower the balances on your revolving accounts. Simply lowering the balances on your open credit accounts can give quite a boost to your credit scores. When balances are and increments of twenty percent of your total available balance on that account, the FICO system will take note.
Collection agencies are stressful to deal with. Make sure you know that cease and desists of any type can only stop you from being harassed, you’re still going to be in debt. Even when the phone calls from collection agencies have stopped, the associated debts must still be paid.
There are many law offices that promise quick credit fixes; avoid these. Because so many people are experiencing credit problems due to the economy, shady lawyers that advertise useless, possibly illegal credit score repair services have appeared. Before trying to get credit assistance from any lawyer, make sure to do research on them.
If your poor credit score frustrates you, try using these tips to change it. The helpful hints here can end your credit rating free-fall and even encourage it to start rising.
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