Bad credit can really detour your plans for your life in irritating ways. Your financial options will diminish, fewer options will be open to you and you will not be able to take advantage of new credit line offers. That said, it is possible to restore your credit to its former glory and prevent it from being wrecked again.
If credit score repair is your goal, create a plan and stick with it. You must be committed to making real changes in the way you spend money. Only buy what you absolutely need. Look at your purchases closely. If you cannot afford something, and you do not need it, do not buy it.
Pay down any credit cards with a balance in excess of 50%, preferably getting them down to 30%. If you owe more than half of your credit limit on any credit card, this will have a negative impact on your rating. Plan to pay down that card as soon as possible, or see about transferring some of that debt.
Interest Rates
You may be able to reduce interest rates by maintaining a favorable credit rating. Lower interest rates will reduce the amount of your monthly payment, and can also make it easier to repay your debt faster. Obtaining the best possible interest rate saves you money, and helps you maintain your credit score.
To avoid paying too much, you can refuse to pay off huge interest rates. The incredibly high interest rates can get challenged and reduced in some situations. However, the contract you signed ensured that you agreed to pay off your interest. If you decide to sue your creditors, you should be able to have the interest rates recognized as too high.
Before using a credit counselor, it’s important to research them completely. While there are lots of counselors with your best interest at heart, there are others who just want your money. Other programs, while they sound good, are complete and total scams. A wise consumer will find out if the credit counselors they deal with are legitimate or not.
Give the credit card companies a call and find out if they will lower your credit limit. Doing this keeps you from overtaxing yourself. It also shows the lending company that you are responsible.
Credit Unions
Credit unions are an option for those who have run out of options. Credit unions are normally located in communities and offer lower interest rates than national banks.
It will be easier to increase your credit rating if you only have one open credit card account. It is important to make small payments or transfer a balance to the open account. By doing this, you can work towards completely paying off one credit card with a large debt, rather than working piecemeal with many smaller debts.
Make sure that you pay more than the minimum balance owed on all of your credit cards to improve your credit. First, work on the accounts with the highest interest rates and the highest balances. This will show responsibility to creditors.
These tips will help you on your way. You can repair your credit issues and enjoy a brighter, more financially sound future. A high credit rating is essential for most people, so learning about repairing your credit is hardly a waste of time.