Having a bad credit rating can seriously delay your goals in life. A bad credit report closes doors to financial options and opportunities. There are a few things you can do to improve and protect your credit.
When you want to fix your credit, you need to start somewhere. Have a realistic plan and stay with it. You must be committed to making real changes in the way you spend money. Be sure to buy only the things that you need. When considering a purchase, ask yourself if the purchase is necessary and affordable, if you answer yes to both, you should buy it.
If you want to repair your credit but do not qualify for a regular credit card, consider a secured credit card. 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 new credit card in a responsible manner will help to build back up your good credit rating.
Good credit scores allow you to take out loans, buy a house, and make other large purchases. Making mortgage payments in a timely manner helps raise your credit score even more. Home ownership demonstrates that you have financial stability because they are secured by a valuable asset, and this results in a raised credit score. This is helpful in case you want to borrow money.
Excessive interest rates can be contested. However, it is best not to sign contracts containing them in the first place. You may be able to challenge an interest rate that is extremely high. However, the contract you signed ensured that you agreed to pay off your interest. The only way you are legally able to sue the creditors is if you are able to prove that your interest rates are much too high.
Make sure you review all of the negative marks against you on your credit report. While the credit item itself may not be in error, if you can find a mistake in the date, amount, or any other factor, you may be able to have the whole item removed from your report.
As part of your credit repair process, it is a good idea to terminate all of your credit cards except one. Transfer your balances to this one card, with the lowest interest, if this is possible. You can pay down one credit card in full, rather than chipping away at many.
Check over your credit bill each month to make sure there are no errors. Whenever you see any, it will be necessary to discuss the situation with your creditor so that they do not submit negative information to the credit agencies.
Pay the balances on all credit cards as soon as you can to start the credit restoration process. Pay off high-interest debt first, as it grows the fastest. This builds the positive credit history that creditors like to see.
Try and pay down any revolving account balances in order to boost your credit score. Your credit score can be raised if you lower your balances. The FICO system makes a note to your credit report every time your account balance reaches a new 20% increment of your total available credit.
An experienced, honest credit score improvement agency can be very helpful. There are far too many of these companies that are quite simply fraudulent. Far too many people have been bilked by dishonest agencies. Check online reviews about the company, the Better Business Bureau, and even the State Attorney General's office to find out what their reputation is before signing anything or giving them any money or account numbers.
Lenders won't bother to look at those statements and therefor they are a waste of your time. The statement will only draw further attention to negative reports on your credit history.
Keep your credit cards in your wallet. Try to use cash when purchasing. If you must use your credit card, pay it back in full.
An instant solution to your problems is usually too good to be true, especially when that solution is some kind of "magic" debt relief being offered by a lawyer. Because so many people these days suffer from credit problems, attorneys and scam artists have come up with ways to charge a high price for repair schemes that can be illegal and useless. Before you give a lawyer any money or any personal information, make sure to do a thorough check on them and their practice to make sure they are legitimate.
Part of a nasty credit crunch is having multiple debts that you do not have the money to pay. Be sure to give a portion of your spendable income to each of your creditors. Making payments, even just minimum ones, will prevent your debts from going into collection.
Come up with a way to pay off any existing unpaid debts. Although these accounts won't be expunged from your credit report, they will reflect the fact that you have paid them in full, and the problems you have encountered as a result of having unpaid debts on your report will be reduced or eliminated.
If you are having trouble making payments, then you should contact the creditors to work out an alternate plan. If you contact them proactively, creditors often work with you in developing payment plan that they do not report to credit bureaus. This can help you feel less stressed about an account that is not very flexible.
These tips can help you repair your credit and keep it high. The time you invest educating yourself regarding credit restoration is worth every minute.