With unemployment so high and costs of living continuing to rise, it is unsurprising that the average credit score is lower than it has been in some time. Thankfully, these hints will give you some valuable insight into how you can proceed to build better credit ratings.
If you want to repair your credit but do not qualify for a regular credit card, consider a secured credit card. With a secured card, you have to fund your account before you use the card so that the bank will be assured that you will pay off your debts. If you open a credit card account, keep charges fairly low, and pay it on time, this will go towards improving your credit score.
Pay down any credit cards with a balance in excess of 50%, preferably getting them down to 30%. If any of your balances climb past half of your available credit limit, pay them down or spread the debt around other accounts, otherwise, your credit rating gets tarnished.
In order to make sure that you do not overpay, know that you can dispute your really high interest rates. In most cases, creditors are somewhat limited in the amount of interest they can charge. However, you agreed to pay the interests off when you signed the contract. Suing your creditors can be effective in some circumstances in cases where the court considers the interest rates to be excessive.
A good tip is to work with the credit card company when you are in the process of repairing your credit. This will keep you from increasing the amount of debt that you have. See if the company will allow you to modify the monthly due date, or reduce the payments.
Before you hire a credit counselor, make sure that you have done your research. You will find some counselors that truly want to help you fix your credit situation, while others may have different motives. Some are simply fraudulent and are out to get your money. Intelligent customers will make sure to determine the legitimacy of a credit counseling agency before acquiring their services.
Make sure to have as low as possible of a credit line available to you. This will stop you from racking up giant credit card bills, and show lenders you are responsible.
Before you agree to settle your debt, you need to know how your credit will stand afterwards. There are ways that are less damaging than others, that is why it is important to research about it before starting an agreement with creditors. Some debt settlement companies are only after profits and do not communicate the likely consequences of their methods.
If you are doing hardcore credit restoration, you need to scrutinize your report for negative entries. The debt itself may be legitimate, but if you find errors in its metadata (e.g. the date, amount, creditor name), you might be able to get the whole entry deleted.
Sign up with a credit union if you need to get a new credit line and are having a hard time. These credit unions can probably give you better credit options in the long run.
Dispute any errors that you find on any of your credit reports. Send a dispute letter along with supporting documents to the credit agency that recorded the errors. Your letter should be sent with a request for return receipt, so you can have a record that it was received by the reporting agency.
Now that you better understand different credit repair methods, it’s time to develop a plan and put it into action. Use this information to help increase your credit rating.