SET THE STAGE FOR YOUR CREDIT REPAIR
Are you one of those who had been making payments in full to your collection agencies faithfully every month, but soon later, some struggles like financial emergencies or exponentially growing debt or any other catastrophe, give rise to late or even missed payments? Credit repair is the best possible solution for bringing your credit back from the brink and improving the health of your credit report.
A good and reasonable credit score to live a decent financial life falls somewhere around 700 to 750. With such good scores, you are even ready for any new credits at better rates. If you are too below the mentioned credit score, then you need to get ready for an uphill battle. Before trying to improve your credit score, you need to stop the creation of more debts and pay down the existing balances.
Let's walk through certain steps to restore your credit to a good condition
Put your feet on the path
Credit repair is neither a nightmare nor something beyond reality. "The Power of Now" is the secret of discovering the destiny of your credit renovation. Start sowing the seeds today to see the fruitful result in the near-future. Though there are a lot of possible moves, the most predominant advice given by experts for solving credit score troubles is to pay off credit cards on time.
Rectify errors on your credit reports if any
A credit report is just a detailed master document of your borrowing behaviour. It includes
- Your Personal Information
- Summary of the different types of accounts you possess
- Detailed description of each of your credit accounts with payment history
- Public records (like bankruptcy, tax liens or any severe financial mistake)
- List of lenders who have checked your credit report to approve any of your credit applications.
So, hope you can visualize how credit report plays a crucial role in your financial battle and how important it is to review the credit reports on a regular basis. There are quite a few sources for getting free copies of your credit reports. Look for signs of identical theft, clerical errors or any inaccurate information in your credit report. Write a letter to the credit bureau explaining the errors and asking the bureau to investigate them for correcting the errors that are present.
Possess the Skill of Good Credit Management
Wondering what's that skill? It is the ability to pay bills on time and to pay off the entire balance within a reasonable time interval. Paying every bill to every creditor before the due date is one among the most important things in your life that needs great attention, time and effort. You need to aware of the fact that any missed payments that are longer than two months of the due date will remain on your credit report for seven years. Such missed payments would obviously have a negative impact on your credit reputation.
Have Control on Your Credit Cards
Improper usage of credit cards often hurt your credit score. Each credit application gets painted on your credit report. So, the more credit cards you apply for, the higher is the probability of damaging your credit reputation but variety of same day loan options may help you to recover from bad credit score. It's always better to limit your credit cards based on your genuine needs. Using every card you own is another essential practice to maintain good credit. It does not mean that you need to use every card to buy things or carry some balance.
Your credit account is pushed to the category of "past due accounts" once you miss a payment. The degree of past due determines your eligibility for borrowing in future. As the creditors get increasingly frustrated because of your delinquency, your credit score gets heavily injured. Hence, dealing with past due accounts as early as possible would cure the injury before it worsens. There are quite a few options for repairing such accounts.
- You can make a large one-time payment to cover the entire balance available on your delinquent or more easily termed "past due" accounts. The sooner you pay this lump sum amount, and the lesser would be the amount required to pay. It is the most simple way to protect your account from being marked as "charged-off" in your credit report. Charged-off accounts are those accounts that are 180 days past due.
- If the single huge payment traps you, you can discuss with your creditor about spreading it over a few months. However, you will need to complete the payments before the term decided by your creditor. Though this option has very less probability of occurrence, you can give it a try. Fortunately, it would work if your creditor is so generous and kind.
- If your account is at the risk of being defaulted, you can request the creditor to agree to a settlement. A settlement means the condition of paying just a partial amount of the entire past due balance and cancel the remaining balance.
Rebuilding your credit is not just one day/one month job. You need to cultivate good financial habits and learn to deploy the right financial activity at the right time with the help of the steps given above.Read More
Achieving the goal of good credit after any financial disaster requires roughly six-month of consistent effort, which is a tolerably short span of time.5 / Jan / 2016
Another easy trick is to pay bills online by setting reminders to make credit card payments as minimum as possible.6 / Jan / 2016
For example, if your credit card has the credit limit of $10,000, it is advisable to owe not more than $5000 on your card.