10 Ways to Fix your Credit
Todays unfortunate economic situation has not only hurt the economy, but it has also caused trouble for many peoples credit. When the economy was in good shape and your income was better, chances are your credit score ranged somewhere in the 700s. Now, with the turn in the market, your score has also seen a drop and you are most likely scoring in the 600s. The temptation is always there to neglect bad credit, however credit is a valuable asset to safeguard, especially in trouble times, and if yours is suffering, you might consider taking the steps to repair it.
Fixing your credit is not an easy process, however you have to start somewhere, and the best place to begin is with your credit report. As citizens of the United States, we are legally required access to our credit report; and, it is easy to obtain from companies such as Equifax, Experian, and Trans Union. When you obtain your credit report, you will be able to review it to make sure there are no errors. While reviewing your report, make sure to recognize those discrepancies that are responsible for your low credit score, thus enabling you to fix habits that might be affecting your credit.
When someones credit score is determined, the majority of the score involves the persons ability to meet obligations to creditors. Society has a negative view of creditors " we see them as hateful people who only want to make our lives worse. However, most of the time the creditors are willing to work with you if you will talk with them. Although you may not be able to pay the entire payment, be honest about what you can pay and try to negotiate with them " you might be surprised by what you are able to work out.
If you do work out an agreement with the creditor, make sure that you get the agreement in writing. While the person you spoke with on the phone may have sounded legitimate, you need to be sure that the new payment plan will not affect your credit. A written agreement is your only defense against future problems on your credit report.
Next, one of the wisest decisions you will make is to cut up your credit cards " that is right, get out the scissors! You need to eliminate the temptation to charge, which ultimately leads to further liabilities that will be more difficult to pay. When you remove the cause of debt it is one of the biggest steps towards rebuilding your credit because the temptation is no longer present.
And, although you are going to cut your cards, you might consider keeping the accounts open, because closing them all at once can be difficult on your credit. However, on the contrary, when you close accounts over time (a good target is 2 accounts every six months) your credit is actually helped. Also, when you are doing this, try to eliminate the accounts you have had the longest last.
When you have debt, you obviously also have bills and payments to make. Everyone who pays late always has an excuse, however credit card payments are not something to take lightly. Payments of credit cards should be made on time and in full " they should be your first priority. Otherwise, your credit will be affected.
When you have multiple credit cards, your debt can be more than you bargained for and the urge to pay the minimum payment is always there. However, when you pay the minimum amount owed, it will take you a long time to pay off your balance and you will end up paying a lot of interest. In the long run, it is always better to pay more than the minimum payment " even if it is just a little bit more.
Obviously the first concern with credit repair is always eliminating our debts and establishing proper payment practices. However, a great idea to build better credit for the future is to take out a secured credit card. You have to invest your own money in these cards; therefore the temptation to spend more than is completely necessary is often eliminated. And, the card will also help build your credit.
Another important part of repairing your credit involves creating a budget. When you budget properly, you understand the inflows and outflows of your finances " your income and expense. Also, a budget can help you effectively pay off your debts. Because of this, you will be able to better meet your financial obligations.
It has never been easy for anyone to repair their credit, and it has definitely required sacrifice and patience. In the long run, it is necessary and worth it. Be diligent. It is more difficult in our current economy, but it is definitely possible.
Fixing your credit is not an easy process, however you have to start somewhere, and the best place to begin is with your credit report. As citizens of the United States, we are legally required access to our credit report; and, it is easy to obtain from companies such as Equifax, Experian, and Trans Union. When you obtain your credit report, you will be able to review it to make sure there are no errors. While reviewing your report, make sure to recognize those discrepancies that are responsible for your low credit score, thus enabling you to fix habits that might be affecting your credit.
When someones credit score is determined, the majority of the score involves the persons ability to meet obligations to creditors. Society has a negative view of creditors " we see them as hateful people who only want to make our lives worse. However, most of the time the creditors are willing to work with you if you will talk with them. Although you may not be able to pay the entire payment, be honest about what you can pay and try to negotiate with them " you might be surprised by what you are able to work out.
If you do work out an agreement with the creditor, make sure that you get the agreement in writing. While the person you spoke with on the phone may have sounded legitimate, you need to be sure that the new payment plan will not affect your credit. A written agreement is your only defense against future problems on your credit report.
Next, one of the wisest decisions you will make is to cut up your credit cards " that is right, get out the scissors! You need to eliminate the temptation to charge, which ultimately leads to further liabilities that will be more difficult to pay. When you remove the cause of debt it is one of the biggest steps towards rebuilding your credit because the temptation is no longer present.
And, although you are going to cut your cards, you might consider keeping the accounts open, because closing them all at once can be difficult on your credit. However, on the contrary, when you close accounts over time (a good target is 2 accounts every six months) your credit is actually helped. Also, when you are doing this, try to eliminate the accounts you have had the longest last.
When you have debt, you obviously also have bills and payments to make. Everyone who pays late always has an excuse, however credit card payments are not something to take lightly. Payments of credit cards should be made on time and in full " they should be your first priority. Otherwise, your credit will be affected.
When you have multiple credit cards, your debt can be more than you bargained for and the urge to pay the minimum payment is always there. However, when you pay the minimum amount owed, it will take you a long time to pay off your balance and you will end up paying a lot of interest. In the long run, it is always better to pay more than the minimum payment " even if it is just a little bit more.
Obviously the first concern with credit repair is always eliminating our debts and establishing proper payment practices. However, a great idea to build better credit for the future is to take out a secured credit card. You have to invest your own money in these cards; therefore the temptation to spend more than is completely necessary is often eliminated. And, the card will also help build your credit.
Another important part of repairing your credit involves creating a budget. When you budget properly, you understand the inflows and outflows of your finances " your income and expense. Also, a budget can help you effectively pay off your debts. Because of this, you will be able to better meet your financial obligations.
It has never been easy for anyone to repair their credit, and it has definitely required sacrifice and patience. In the long run, it is necessary and worth it. Be diligent. It is more difficult in our current economy, but it is definitely possible.
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