Having poor credit can be a devastating occurrence in life. It can prevent you from leading the life you desire and living your life to its full potential. But, you can fix your credit in a few simple steps and protect it for the future.
Credit Rating
There are secured credit cards available if your credit rating is too low to open up a regular credit card account. You are more likely to be approved for this type of card because, once funded, the banks feels secure that you will pay them back. By using a new card responsibly, your credit rating will start to increase.
For a credit score boost, an installment account will help. You have to keep a monthly minimum on an installment account, so make sure you open an account that you can afford. A properly managed installment account will work wonders on your credit rating.
The first step to repairing your credit is paying what you owe. To help your credit, you should be paying the full amount owed within the time allowed. Once you have started to pay towards your past-due accounts, you credit score will gradually improve.
Make sure you check out any credit counseling agency you consider using. While some counselors are legitimate, offering genuinely helpful services, others have ulterior motives. Other counselors are nothing more than scam artists. To help protect yourself from fraud, investigate any credit counselors. One way to check an agency out is to check with the Better Business Bureau.
Stay cautious and aware of scams online that can lead you to even bigger problems. There are less than honest entities that will show you how to make a brand new credit file. This is illegal and you’ll get caught. The end result of getting caught during the crime could be expensive legal fees and a possibility of time behind bars.
Prior to agreeing to a debt settlement agreement, find out how that process is going to impact 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. Many collectors just want to get paid and don’t care about credit consequences.
If you are living beyond your financial ability, stop now. You need to change your way of thinking in this regard. Easy access to credit makes it simple for many people to buy expensive items that they do not have the money for, and a lot of individuals are dealing with the consequences of those purchases. Take a deep look at your finances, and determine what you can realistically afford to spend.
Credit Card
It will be easier to increase your credit rating if you only have one open credit card account. You can make arrangements to pay the balances, or transfer the balances of your closed credit card accounts to your single remaining credit card. This way you can work on paying one credit card balance off, instead of a bunch of smaller ones.
When you start fixing your credit, pay down balances on the credit cards as soon as you can. First work on the cards with the steepest balances or interest rates. This helps creditors realize that you are using credit cards wisely.
This helps you retain a proper credit status. Late payments are added to credit reports and they can damage your chances of getting loans or a home in the future.
It is important to read all credit card statements you receive. You want to double check that all the charges are accurate, and that you are not paying for something you did not purchase. You need to be sure that everything is correct on the statements.
If you go with a repair company to improve your credit score, be sure it is legitimate. Like any industry making claims to help others with their finances, scoundrels and incompetents are usually only discovered after you have lost money, so do your research up front. Unfortunately, there have been quite a few people who have been scammed by these companies. Take the time to read reviews of different agencies. This will allow you to find an honest one to work with.
Credit cards should be avoided. Do all of your spending with cash or debit cards. When you find credit card spending unavoidable, pay down your balance immediately.
Building your credit back up is the number one way to fix a bad credit score. Prepaid credit cards can help you to break bad spending and repayment habits. This will make you appear responsible to future potential lenders.
Credit Score
Your credit score is significantly affected every time a fresh line of credit is opened by you. Resist the urge to sign up for credit cards even when they promise you instant savings at the checkout. As soon as you open a new credit line, your credit score drops.
Create a plan to settle all of your unpaid and past-due accounts. While this will not remove the debts from your credit report completely, they will be showing as paid and no longer negatively affect your rating.
It is illegal for companies to threaten you during collections. Take a written account of it to pursue action against them. You need to know what the laws are that protect your rights as a consumer.
Credit Counseling
If you are unable to make minimum payments, contact the better business bureau for information on a trustworthy credit counseling service. Often, these organizations can work with your creditors to work out an appropriate repayment plan and can help you focus on improving your finances over time. Credit counseling can help you get back on your feet again financially, and teach you how to better manage your financial situation.
Use these and other tips to improve and maintain a credit score. It is always worth your time learning how to fix and maintain good credit, since it has a major impact on most of the larger financial deals you will make.