No matter what your current situation, you have probably damaged your credit by opening one too many credit cards or being affected by the economic downturn. Fortunately, you can take some actions to get your credit score climbing in the right direction.
Creating a payment plan and sticking with it is just the first step to getting your credit on the road to repair. Making changes to become a wise spender means you have to make a budget and rules, then follow them. Don’t buy the things that aren’t needs. See if each purchase is necessary and affordable and only purchase something if the answers are “yes”.
If you have credit cards with a utilization level over 50%, then pay them down until they are below 50% utilization. If your credit card balances exceed 50% of their limits, it will lower your credit score, so spread your debt over multiple cards, or better, pay down the balances.
If you find that you have a credit card and the interest rate has gotten to high, you do have the option to not pay the debt, though there will be consequences. In most cases, creditors are somewhat limited in the amount of interest they can charge. However, when you signed up for the line of credit you also agreed to pay the interest. You can consider suing your creditors if the interest rates are outrageously high.
Never trust a business or person who offers to clear up your credit for a price. Especially if it is correct information they say they can remove. Negative credit information remains on your record for up to seven years. Items that you can get taken off your record are those that have been reported incorrectly or unfairly.
Do not do things which could cause you to go to jail. Scams abound on the internet that show you how to change your credit file. You will be prosecuted, it is against the law. The legal consequences are expensive, and you might be sentenced to jail.
Learn what affect a debt settlement plan will have on your credit rating before you sign up. You should know all about the methods you can use if you are going to enter into an agreement with someone. Creditors just want their money and really aren’t interested on how it will affect your score.
Do not spend beyond your means any longer. This might require a re-thinking of your lifestyle. While you may see your peers racking up credit debt, be sure to not fall into the same trap. Examine your budget, and figure out how much extra money you have to shop with.
Too many credit cards is a common cause of financial strain, so close all of your accounts aside from one. Make the minimum payment each month on your other accounts, but make the largest payment possible to the one account you are focusing on. You can pay down one credit card in full, rather than chipping away at many.
Repairing the credit you damaged might seem overwhelming, but you can fix your credit with effort and the right kind of information. Use the information you have learned here to help get you started on the journey to a better credit score.