With the high prices of food and gasoline in the nation today, it’s incredibly easy to fall behind on your bills. Once you fall behind just a little bit, things begin to snowball out of control for even the most responsible people. So if you’re one of the millions currently struggling with bad credit, you need to read this article.
If you have been repairing your credit for a while and have been paying responsibly, ask your credit card company to raise your credit limit. Debt utilization, the ratio of your debt to your credit limit, is one factor that determines your credit score. If you get a limit increase, then that ratio will be lower, making you appear to be a lower credit risk.
Do not be taken in by for-profit companies that guarantee to repair your credit for you for a fee. These businesses have no more ability to repair your credit score than you do on your own; the solution usually ends up being that you need to responsibly pay off your debts and let your credit rating rise slowly over time.
If disputing an account with the credit agency does not produce results, dispute it with the actual creditor. Send them a letter through the mail advising them that you do not believe that the debt is yours and request that they provide you written proof of the debt. If the account is older, chances are they will not have the records. If they cannot prove the debt they must remove it from your credit report.
Stay away from Payday loans. They have the highest interest rate of any loan you can get. In the event that you can’t pay on time, you will literally be digging yourself into a hole that you can’t get out of, as the penalties and interest rates continually rise.
If you must use a credit card, protect your credit and manage your finances better by paying it off in full each month. If you pay it off each month, you will generally not earn interest on your purchases, so you pay only what the item actually cost at the store. Also, carrying over balances may raise your APR, meaning you pay even more in interest over time.
An important tip to consider when working to repair your credit is to ideally keep your credit card utilization no more than 25 percent of the total credit limit. This is important because your credit card utilization is directly responsible for your credit rating. If your balance is high, aim to bring it down to no more than 70 percent.
Since passage of legislation known as the Credit Repair Organizations Act, companies must supply you with a required form known as the “Consumer Credit File Rights Under State and Federal Law,” before you are required to sign a contract to hire them to aid you in regards to repairing your credit. In addition, they must provide you with a written contract which specifies all of your obligations and rights. Make sure you read through all documents before signing a contract. A credit repair organization cannot charge you a fee until they have fulfilled all of their promised services. Also be aware that they must wait three days after you have signed a contract before they can perform any services. During this three-day waiting period, you may void the contract at any time, without payment of any fees.
The odds are great that no one ever explained to you the dangers of bad credit, especially not the creditors themselves. But ignorance is no excuse here. You have bad credit, now you have to deal with it. Using what you learned here to your advantage, is a great way to repair your credit score and to permanently fix your rating.