Smart Approach On How To Fix Your Credit

Whether you fell prey to the guys handing out credit cards like candy on campus, got carried away on one too many shopping sprees or got hit hard by the recent economic downturn, you probably did some damage to your credit. Fortunately, you can take some actions to get your credit score climbing in the right direction.

Make sure that you are never using more than 50% of your credit card’s limit. When your debt is over 50%, credit ratings usually go down. With that said, try to spread out the debt that you have or try paying it off.

Lower Interest Rates

You can keep your interest rates lower by working to keep your credit score as high as possible. Lower interest rates mean lower payments, which allows you to pay off debt faster. Obtaining lower interest rates will make it easier for you to manage your credit, which in turn will improve your credit rating.

Getting a reduced interest rate is the easiest way to reduce your overall debt. Creditors who charge exorbitant interest may be just a law suit away from having to wipe the slate clean. However, you signed a contract agreeing to pay off interests. If you decide to sue your creditors, you should be able to have the interest rates recognized as too high.

Start paying your bills in order to repair your credit. It is key that you pay them on time and in full. Do the best that you can. Getting rid of past-due bills will have a fast and dramatic effect on your credit score.

Credit Unions

Joining a credit union may be a way to boost your credit score when you are having a hard time getting credit. Credit unions typically offer a wider variety of credit options at better interest rates than a traditional bank. Credit unions are usually non-profit, which means better deals for you.

Any time you establish any payment plan with any creditor, make sure you get it in writing. You need to have a contract in writing so if the creditor goes belly up or they change your terms, you can catch them on it. When you pay it off, send a written copy of proof of payment to all three credit reporting agencies.

When you receive your credit card statement, go over it carefully. It’s up to you to ensure that the charges on your bill are correct and that you haven’t been double charged, overcharged or charged for something you didn’t buy. The responsibility lies with you to verify that each charge is accurate.

When lenders examine your personal credit history, they will not consider any statements you have made about the negative marks. The basic reason for bad marks on credit is simple. You did not pay something you were supposed to pay. Lenders are often discouraged by people that make excuses for bad credit.

Avoid using your credit cards. Instead use cash for all your purchases. If the purchase you’re buying is more than you can currently afford you can use a credit card, but pay it back as soon as possible.

Collection Agencies

One of the most stressful aspects of handling bad credit is dealing with debt collection agencies. Consumers can try to use a cease and desist letter if an agency is harassing them, but their usefulness is limited. You will still have to pay what you owe even if collection agencies stop calling you.

Unfortunately, sometimes you have more debts than you have money to pay them off. Take out a little money for each one of the creditors that you owe. This will keep your account in good standing while you are paying down your debt.

It goes without saying that if your credit is poor and needs repairing, you need to start from the bottom and build. Prepaid credit cards make for a simple way to build up your credit, because there’s no risk of late payments or over drafting which can cause negative marks on your score. You want to demonstrate your credit worthiness and responsibility to potential lenders.

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. Apply the tips you learned here and get started on your way to good credit.