If you had kept a record of who you owed money to then perhaps your debt could have been avoided. So now it is time to exercise crisis management and to repair your credit score. Follow these tips to repair a bad credit score quickly and efficiently.
Credit Cards
Any of your credit cards with balances that are above 50% of your overall limit need to be paid off as soon as possible, until the balance is less than 50%. You should keep your balances under fifty percent; anything over this and you can lower your credit rating, so spread out the money you own and pay down your credit cards.
If someone promises you to improve your score by changing your factual history, this is a scam. Unfortunately, negative marks will stay on your record for seven years. However, information that is not correct can be removed.
Joining a credit union may be helpful if you want to work on improving your credit score and are finding it difficult to access new credit. They may offer better rates and more credit due to local conditions as compared to national ones.
If you find any errors on your credit reports, dispute them. Contact the credit agency in writing, with documentation to support the errors that you are disputing. Mail your dispute documents to the agency using certified mail and a return receipt so that you can prove the agency received them.
Do not spend more than you can afford. You will need to change the way you think. A lot of people rely on credit to maintain an unrealistic lifestyle, but when the credit runs out, all that’s left is a very big bill. Take a deep look at your finances, and determine what you can realistically afford to spend.
Make sure you will get a plan in writing if you decide a payment plan is the best option for you with your creditor. This way you have documentation of the agreement in case the creditor decides to change their mind or ownership of the company changes. If you have finished paying it off, you should request a confirmation so you can send it to the credit reporting agencies.
You need to read and understand the credit card statements you receive in the mail. Always check to make sure that you are being charged correctly, and not being double charged or charged for items that you did not buy. It is only your responsibility to make sure everything is correct and error free.
Credit Score
Lowering the balances you carry on revolving accounts can improve your credit score. Having a lower balance will boost your credit score. The FICO system notates when a balance on a card is at 20,40,60,80, and 100 percent of the total available credit.
Make sure the credit repair agency is reputable. Too many of these services will use your desperation to make money. Sadly, many people have fallen for credit restoration scams. See if the company in question has a reputation on any of the user review sites before you commence business with them.
Although they mean a lot to you, these statements are often set aside when lenders go over your credit history. It can actually backfire. It brings attention to a part of your report you would rather a lender not look at very closely.
When you are having trouble paying your bills, debt collection agencies will start contacting you demanding payment. Consumers can legally issue letters to collection agencies to cease and desist if they are being harassed. These letters will discourage contact from collection agencies. Although these letters make collection agencies cease contacting people, they are still expected to pay their debts.
When repairing your score, be cautious of law offices and lawyers that promise fixes for credit. The state of the economy has caused many lawyers to practice unethical methods by promising credit restoration for a steep fee and not delivering. Check up on the track record of any lawyer whose credit advice you intend to seek.
Unfortunately, sometimes you have more debts than you have money to pay them off. Take the money you have set aside for debt payments, and divide it up into portions for each debtor. Regardless of whether you are making the minimum payments or a little more, getting some money will keep your creditors at bay and may stop them from calling collection agencies.
The only way to repair credit is to be more responsible with your credit accounts. Prepaid credit cards are one way in which you can repair your credit. These cards are used like a normal credit card and are reported to the credit bureaus; however, you can only use the amount of money you deposit into your account. Doing this shows lenders that you can be trusted with credit.
As this article has spelled out, fixing your credit is not rocket science, and it may be easier to do than you think. Use the simple information from this article and you should have no trouble fixing your credit score.
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