Whether you fell prey to the guys handing out credit cards like candy on campus, got carried away on one too many shopping sprees or got hit hard by the recent economic downturn, you’ve probably damaged your credit. The following tips will help you take steps to begin to repair it.
Creating a payment plan and sticking with it is just the first step to getting your credit on the road to repair. You must make a commitment to making changes on how you spend money. Avoid buying what you don’t need. Put each potential purchase to the test: is it within your means and is it something that you really need?
The first thing you should do when trying to improve your credit restoration is to build a plan. You have to be committed to making real changes in the way you spend your spending habits. Only buy what you absolutely necessary.
If you have credit cards where the balance is more than half of your credit limit, it should be your number one priority to pay it off until the balance is under 50%.
Good credit scores mean you can easily qualify for a home or car loan. Timely mortgage payments augment your credit score. The more equity you have in your home, the more stability the banks see in you. Having a good credit score is a key factor if you ever need to take out a loan.
Interest Rates
You can lower your debt by refusing to acknowledge the part of your debt that has been accrued by significantly high interest rates if you are being charged more than you should be. Creditors are skirting a fine line of the law when they hit you exorbitant interest rates. You did however sign a contract and agree to pay interest. You need to be able to prove the interest rate charged exceeded your lenders.
If you don’t want to pay too much at a time, you can avoid paying higher interest rates than you started with. In most cases, creditors are somewhat limited in the amount of interest they can charge. Keep in mind that you did sign a contract agreeing that interest rates were acceptable. Should you sue any creditors, it is important to push the fact that the interest rates are outrageously high.
If you want to fix your credit avoid companies claiming they can remove all of your issues, this is a scam.Negative credit information remains on your credit report for a minimum of seven years.
You should always make an effort to pay them on time and in full. Your credit score will quickly rise as you are consistently paying back your overdue bills.
Avoid credit schemes that will get you in trouble. A common scam involves teaching you how to make a completely new, albeit fraudulent, credit file. Do things like this can get you into big trouble with the law. You could go to jail if you have a lot of legal issues.
Outright Scams
Make sure you check out any credit score repair agency or counselor before you do business with them. Many may have ulterior motives, but some are outright scams. Some are outright scams.
Dispute any errors that you find on any of your credit reports. Gather your support documents, make a list of the errors, and compose a letter to pertinent agencies. Mail your dispute packet with receipt confirmation so you will have proof the agency has received it.
Contact your creditors to request a reduction in your overall credit line. Not only can this tactic prevent you from getting yourself in over your head with debt, but it will be reflected in your credit score because it shows that you are responsible with your credit.
Some methods of credit settlement can be a blow to your credit score, and you should be sure of how it will affect you. Creditors are only trying to get the money and could care less how it will affect your credit score.
If you are able to get a payment plan worked out with any of your creditors, make sure you get the terms in writing. Any plan that you agree on should be put in writing and signed by both parties to protect you in the future. If you manage to pay off your debt, make sure you receive proper documentation as proof to send to credit reporting agencies.
Dispute every error you identify on any of your credit reports.
If you are able to get a payment plan worked out with any of your creditors, you should first get the details of the plan in written form. When you pay it off, you should request documentation of this and forward copies to the primary credit reporting companies.
Avoid using your credit cards whenever possible. Try to use cash when purchasing. If you are forced to use credit, pay it back immediately.
If you are determined and ready to learn, you can fix your credit in no time. Use the information you have learned here to help get you started on the journey to a better credit score.