Many people find themselves having to deal with bad credit due to the downturn of the economy, the rise of the cost of living, as well as the increase in layoffs. Thankfully, these hints will give you some valuable insight into how you can proceed to build better credit ratings.
If you’re credit needs some work, first you should make a plan you can stick with, and then follow through. You have to be committed to making real changes to your spending habits. Only purchase something if you cannot live without it. If you are buying something because you want it, and don’t need it, put it back on the shelf.
Credit Card
If you are unable to get an unsecured credit card due to your low credit rating, consider a secured card to help reestablish your rating. Most likely, a secured credit card will be easy for you to get, but you have to fund the credit account before you purchase so the bank knows that you won’t miss any payments. Using this card responsibly will improve your credit rating over time, and eventually you’ll be able to get a normal credit card again.
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. Any time you exceed 50% of your credit limit, your credit rating is affected. Pay off credit cards as fast as you can, or spread the debt out further.
When trying to rehabilitate your credit, it is important to work with each credit card company you are indebted to. By keeping the lines of communication open, you will avoid getting into more debt, making your credit score even worse. You can even ask for help, such as pushing back the due date of your monthly payments or reducing the interest rate.
Credit Counselor
Before using a credit counselor, it’s important to research them completely. Many counselors are on the up-and-up and are truly helpful. Others just want to take money from you. Some will try to cheat you. If you’re smart, you’ll make sure the credit counselor is not a phony first.
Don’t attempt to fix your credit in a way that will result in you breaking any laws. Don’t buy into scams that suggest you create new credit files. This is illegal and you’ll get caught. Penalties can include large fines and possibly even incarceration.
Contact the credit card company and ask to get your card limit lowered. It will help to keep spending under control, and also sends a positive message to potential lenders. This means you might have a better opportunity of obtaining necessary loans in the future.
If you find any errors in your credit reports, you should dispute them. Contact the credit agency in writing, with documentation to support the errors that you are disputing. Your letter should be sent with a request for return receipt, so you can have a record that it was received by the reporting agency.
Stop living beyond your means. You will have to change the way you think in order to do this correctly. Many people have acquired debts they can’t pay off, which has affected the amount others will pay to have credit. Spend some significant time studying your finances, and set a realistic budget to which you can stick.
Try to pay down all of your debts until you’re only carrying a balance on one. Try to make a payment or transfer your balance to your open credit account. This can help you avoid paying down smaller balances and focus on paying one card off.
Why would you wait until tomorrow to make changes that could be done today? You could easily use the tips that have been provided to better your credit score. Act now to start on the road to improving your life by improving your credit.
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