Not Sure Where To Start Repairing Your Credit? These Tips Can Help!
Raise your hand if you were one of the millions of people who promised yourself you'd only use your credit cards for an emergency. Everyone who read this just raised their hand, and that's because no one takes on a line of credit with the intent of falling into debt. It happens, though and then it's all downhill unless you take the steps to fix your credit score. Here's how you can do it.
Use a process of disputing and documenting your efforts in repairing your credit file. Erroneous reports can be the most difficult to remove from your history without following the proper steps. It is important to dispute a bad report, however, it is just as important to make a documented log on your contact and dispute efforts.
Buy in cash. Credit and debit cards have made purchasing a thoughtless process. We don't often realize how much we have spent or are spending. To curb your shopping habits, only buy in cash. It will give you a visual to how much that item actually costs, and make you consider if it is really worth it.
When working to repair your credit, it's important to consider the different ranges that different reporting agencies use. This is important to know, so that you know the meaning of your own score. The main scores used are FICO: 300 - 850, Experian: 330 - 830, Equifax: 300 - 850, and TransUnion: 300 - 850.
Utilize the tools that are on the Federal Trade Commission's website. You will find sample letters that you can use to dispute things that you find inaccurate on your credit report. There are additional ways to dispute these inaccuracies but they are a bit less user friendly and can be confusing.
So you are looking for professional help in repairing your credit and wish to seek the services of an ethical company. There are certain signs that warn you that a company is probably one you do not wish to use. If a prospective company does not inform you of your rights and things you can do for yourself for free to repair your credit, they are probably not want that you wish to hire.
Find out how your debt settlement contract will make your credit score look. There are ways to go about this that will have less of an impact and should be learned about before you make any kind of deal with a creditor. They do not care about the effects of what they do to your credit score and are just in it for the money.
To maintain good credit or repair a credit problem, the wise consumer limits him or herself to one credit card. Once superfluous credit cards are paid off the consumer has little reason to hang onto them. They are merely a temptation. Worse yet, they require attention and possibly even maintenance payments. Once the consumer commits to one card there is little reason for them to retain others.
Using a credit card responsibly can help repair bad credit. Credit card purchases all improve credit history. It is negligent payment that hurts credit ratings. Making day-to-day purchases with a credit and then paying off its balance in full every month provides all of the positive effects and none of the negative ones.
Paying cash for smaller purchases will not only save ones credit cards from being overused but it will also help one repair their credit. By keeping down the amounts on their credit cards by paying cash whenever one can will not only limit the bill one has to pay but repair credit.
Pay down your debt. Aim for reducing all of your debts to about 10 percent of available credit. You should pay off the high interest accounts first, and then start on the less expensive accounts. Don't accumulate any new credit. Focus solely on paying down the credit you already have.
Don't open too many new accounts at once. More than two new accounts per year is too many. Opening too many new accounts at one time makes you look desperate for new credit and can hurt your score. Also, you'll eventually end up with too many open accounts on your history.
Contact your creditors. If you cannot repay your debt in whole or at all you should contact them. They may be able to offer you a payment plan or set up future payments for you. You should not avoid them, they will usually work out a plan to get you caught up.
Build your credit back up to repair it. Prepaid credit cards are great for this, since you can get improved with a bad credit score, and there's no way to rack up debt and late fees. Doing so indicates to the person lending that you are a responsible person.
If you are having trouble paying your debts, talk to the debt collectors. Many times collectors will tell you that you have to pay immediately, this is usually so they can meet their quota or get a bonus check. The truth is, they can work with you and allow you to come to an arrangement that will work for you.
Talk to creditors directly to figure out a different way to pay your bill if you cannot afford your monthly payments. A creditor will often times work in conjunction with you to find a plan that they do not report to a credit score if you get a hold of them. This may also alleviate some financial stress and allow you to work on paying off any debt accounts where you are not allowed to make a repayment plan.
At the end of the day, getting out of a bad credit situation is all about arming yourself with the proper information to do so. The net is riddled with misinformation and half-truths so heed this information wisely and use it to pull yourself up by the bootstraps so you can experience a life bereft of bad credit.