Keeping track of your debt when it is incurred could have prevented lowering your credit score even more. But now it is time to go into damage control mode and repair your credit. The following advice can greatly help you rebuild your credit rating.
Planning is the first step to repairing your credit. Making changes to become a wise spender means you have to make a budget and rules, then follow them. Purchase nothing but the essentials. Before you open your wallet ask the questions “do I need this?” and “can I afford this?” If the answer is no to either, put it back on the shelf.
Secured Credit Card
Try to get a secured credit card if you are not eligible for an unsecured card. This will help you fix your credit. Secured credit card applications have a high rate of approval because you must fund a security deposit against your credit limit. If you open a credit card account, keep charges fairly low, and pay it on time, this will go towards improving your credit score.
Your interest rate will be lower if you have a good credit score. Lower interest rates make it much easier and quicker to pay off balances. Receiving competitive credit rates and good offers are important in having credit that you can pay off easily, and that will get you a great credit score.
To improve your credit rating, set up an installment account. When opening an installment account, you need to make a monthly payment, so get something you can afford. Paying on time and maintaining a balance will help improve your credit score.
Do not do things which could cause you to go to jail. There are schemes online that will show you how to establish an additional credit file. Do not attempt this because it’s illegal; you will not be able to avoid getting caught. Think of the legal costs and the possibility of doing hard time.
If you find any errors in your credit reports, you should dispute them. Create a dispute letter for agencies that have the error, and submit additional supporting documents along with it. Sending your letter by certified mail provides you with proof that the letter was received.
Bankruptcy should only be viewed as a last resort option. It can adversely affect your credit for up to 10 years. It sounds very appealing to clear out your debt but in the long run you’re just hurting yourself. If you do file for bankruptcy, it will be extremely difficult to get approved for a loan or a credit card for many years, if ever.
To show that you are serious about improving your credit, start systematically lowering all of your account balances. No matter what the balances are on your credit cards, pay down the highest interest rate cards first. This helps creditors realize that you are using credit cards wisely.
To protect yourself from credit card fraud, it is essential that you carefully review each monthly statement from your credit card companies. You will need to read over every charge on your account to check that it is accurate. The responsibility lies with you to verify that each charge is accurate.
If you are trying to fix your credit, be aware of lawyers who claim to instantly fix your 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. 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.
Building your credit back up is the number one way to fix a bad credit score. Utilizing prepaid credit cards allows you to improve your credit score with no concerns about late payments or negative information ruining your credit report. Potential lenders will see this as a positive thing as it will show you are a responsible person.
Opening too many lines of credit negatively affects your credit score. If you want to keep your credit score high, you need to resist the urge to open new accounts. If you continue to increase your debt, your credit score will continue to drop.
Make a definite plan to pay past due and collection accounts. While this will not remove the debts from your credit report completely, they will be showing as paid and no longer negatively affect your rating.
If you are threatened by a collection agency or debt collector, make a note of it, as what they are doing is illegal. Even if you are in debt, you still have rights.
As you can see, common sense is the essence of rebuilding your credit and beating your debt. If you follow some sound advice and use common sense, you can be on your way back to good credit.