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 probably did some damage to your credit. There are some things you can do to turn your credit around.
Always remember to maintain a strict log of all interactions between you and personnel from any collection agency. Keep track of all your contacts, including emails and letters, and the information pertaining to any phone calls. When sending a dispute letter, send it certified mail as proof of mailing and receipt.
You may feel the need to commit to expensive repayment plans or send in lump sums that you cannot afford. It is important to stick to your budget so you do not over-commit on debt repayment. If you do not fulfill these promises, you could damage your credit worse which will lead to the end of the fleeting relief you had from these arrangements.
Do everything possible to avoid bankruptcy. Filing bankruptcy negative effects your credit score for 10 years. Bankruptcy may sound great because your debt goes away but there are consequences. You may never get a line of credit for any purchases you might need to make if you go ahead, give up on repairing your credit and file for bankruptcy.
Make sure you review all of the negative marks against you on your credit report. Even if the negative credit item itself is not erroneous, if any of the data pertaining to it is, then you may be possible to have it removed from your credit report.
If your credit is such that you cannot get a new card to help repair it, apply for a secured one. When you open a secured credit card account, you place money on deposit to cover any charges you may make. This ensures in advance that you will have enough money to pay for your debt. Even though this card will be secured by your own money, you will make payments and manage it as if it were unsecured. This will improve your credit as you show yourself able to make the payments on time.
Make sure that you are never using more than 50% of your credit card’s limit. Once your balance reaches 50%, your rating starts to really dip. At that point, it is ideal to pay off your cards altogether, but if not, try to spread out the debt.
If you have a hard time making your regular monthly payments, talk to your creditors. Creditors tend to be less likely to make negative credit reports in situations where you take the initiative to work with them. Additionally, this will take some pressure off and help you pay down balances associated with creditors who won’t work with you.
The first step to repairing your ailing credit is to create a manageable, feasible financial plan. You need to change your past habits and build new, better approaches to credit. Only purchase something if you cannot live without it. You should only make a purchase if it is necessary and it fits in your budget.
It can be stressful to try and figure out how to improve your credit, but if you keep at it, you can make things better and see the results you want. With the tips above, you are better prepared to take action and get your credit situation back where it should be.