Having poor credit means you might not get the results you want from companies that look at your credit. Unfortunately, negative credit can limit the things you’re able to do and can determine many things in your future. There is a way, however, to repair your credit and it will open more doors in your life. Using these tips will help.
You may be able to get a secured credit card even if your poor credit has prevented you from getting other credit cards. Anyone can get one, but you must load money onto the card as a type of “collateral”. If you use a credit card responsibly, you will go a long way in repairing your credit.
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%. If you let your balances get too high, your credit rating will drop significantly. You can either spread your debt out by transferring some of the balance to low interest cards, or better yet, pay off as much as you can.
Once you have your credit score higher, you will be able to finance a house. Paying down your mortgage improves your score as well. Owning a home gives you secure financial assets. Having a home also makes you a safer credit risk when you are applying for loans.
Credit Card Company
A good tip is to work with the credit card company when you are in the process of repairing your credit. This will enable you to make sure to keep your credit in good standing and repair any damage that may have been caused. Contact your credit card company and request to change your scheduled due date or interest rate.
If an action can result in imprisonment, draw the line. There are plenty of credit scams that purport to erase your existing credit file and create a new one. Doing this is illegal, and you will be caught. You could end up owing a great deal of money or even facing jail time.
Call and request lower limits on your cards from the credit card companies. This will prevent you from spending too much that you do not have. It will also show the credit companies how responsible you are, and if you do need to get more credit in the future, you will have a much easier time.
Before you agree to settle your debt, you need to know how your credit will stand afterwards. Some ways of dealing with debt repayment are better for your credit score than others, so make sure you are achieving the best outcome for you before you sign anything. Many collectors just want to get paid and don’t care about credit consequences.
You should get all terms and conditions in writing if you choose to deal with a creditor. This will give you important documentation in case of an ownership change or if the creditor tries to back out of the agreement. If you have finished paying it off, you should request a confirmation so you can send it to the credit reporting agencies.
Try not to file for bankruptcy. It is noted on someone’s credit report for 10 years. It may seem like the right things to do, but your future will be affected. Once bankruptcy has been filed, it could permanently halt your chances of ever obtaining credit again in the future.
Pay off any balances as soon as you can. Always pay off the card with the highest interest rate first and then work you way down. It is your job to turn it around and prove your responsible with credit.
Do not carry high balances on any of your credit accounts. Maintaining smaller balances can improve your credit rating. FICO will base your score on what percent of your available balance is in use, so keep that in mind.
Your future will be a little brighter if you fix your credit. You can fix your credit, free of charge. You will be on the right road to find credit score improvement success if you heed these tips.