With so many individuals and families suffering from the financial effects of job losses, increased cost of living, and considerable difficulty making ends meet, it is no wonder that millions are faced with unfavorable credit scores. Follow these tips if you need a better credit score.
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%. Carrying a balance of more than half your credit limit negatively impacts your credit score. Either pay this balance down or spread it out over multiple cards.
A great credit score should allow you to get a mortgage on the house of your dreams. 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.
Avoid paying off high interest rates so that you don’t pay too much. It is important to know the terms of your original agreement for the debt you incurred. Usually if you agreed to the terms the terms will be upheld as legal. If you believe the charges are excessive and your debtor will not negotiate down the interest and other additional charges, state laws might provide you with additional avenues to pursue a reduction in these charges. Federal law provides that when you are billed by a collection company the fees and interest cannot exceed the amount of the original debt. Remember you agreed to pay any interest that accrued over the life of the account. It is possible that you can sue a creditor and claim that the interest rate charged is unreasonably high.
Negative-but-correct information cannot be removed from your credit report, so be wary of promises from unscrupulous companies who promise to remove it from the credit reporting agencies. Unfortunately, this negative information stays on your credit record for at least seven years. If the information is an error, the credit report can be corrected.
Always do research before contracting a credit counselor. Some credit counselors offer real help while others have more dubious things in mind. Some credit services are nothing more than fly-by-night scams. Smart consumers will always check to see that credit counseling agencies are, in fact, legitimate before working with them.
Call and request lower limits on your cards from the credit card companies. This is likely to keep you from overusing credit, which can be a financial burden. It also lets credit card companies know that you are responsible, and this makes them more likely to extend credit to you as time goes on.
Before you decide to go through with a debt settlement, you should be sure you know how it will affect your credit. Research all of your options, make an informed decision about the method you chose, and only then should you agree to the settlement. Most of the time they want their money and don’t care about your credit score.
Though it is hard to make this step, consider paring down the number of credit lines to just one; this will sometimes improve your credit score. It is important to make small payments or transfer a balance to the open account. This way you can work on paying one credit card balance off, instead of a bunch of smaller ones.
It is difficult to just forget about negative reports, but writing a statement is useless. In fact, it could actually make matters worse by bringing to their notice the negative aspects of your report.
Keep your credit cards in your wallet. Try to make purchases using cash only. If you have no choice but to use a credit card, always pay the balance in full each month.
The worst part of a credit crisis may be the collection agencies. Remember that when dealing with harassing collection agencies, consumers have the option to issue a cease and desist letter to stop the harassment. They can prevent collectors from continuing to call a debtor, but they do not excuse the debtor from his or her outstanding financial obligations.
Since you should now have a better understanding of different ways you can use to begin fixing your credit scores, take immediate action to implement them. Don’t let poor credit affect your life any longer. Use the tips presented here to repair you score and your overall financial health.