Credit repair is well worth doing. If you’re interested in improving your financial situation and boosting your credit rating, learning the top 10 things that you should know about credit repair will be really helpful. Bear in mind that improving credit generally takes a bit of time. This means that you should be aware that it’s a project and something which you’ll need to stick to and commit to.
If you do stay the course, you should be able to make a lot of progress, even though this progress won’t happen overnight. When you read the following list of top 10 things you should know about credit repair, you’ll learn some important facts which will help you to create a smart credit repair plan…
10.) Debt Consolidation is Beneficial – When you choose a debt consolidation loan, you’ll put all of your credit-rated debts, such as credit card monies which are owed, under one loan. This low should carry a lower rate of interest than you usually pay. When you make payments on time, you’ll pay less in interest and it’ll be more convenient for you, too. If you owe on more than one credit card, this type of loan may be very beneficial.
9.) Fixing Credit Report Errors is Helpful – Some people dispute errors on their credit reports in order to boost their credit scores. If you feel that some entries to your credit report just aren’t accurate, you may hire a company to help you rectify the mistakes or try to do it yourself. It is one of the faster ways to improve a credit rating quickly.
8.) Avoid Taking On More Debt – You should try not to use your credit cards any more than you have to and you may want to consider cutting up all but one, which should be used only in emergencies. It’s good to have a credit card and use it occasionally. However, you should shoot for a debt ratio of ten to twenty percent of your permitted credit limit. The lower, the better. The lower the ratio, the better your credit score.
7.) Make Payments on Time – A lot of people hurt their credit ratings because they fail to make payments on time. If you want to practice effective credit repair, you need to put good credit after bad and this means making payments right on time, even if it’s for the minimum amount. It’s about being diligent and showing creditors that you respect their deadlines.
6.) Start Budgeting Carefully – Some people don’t have budgets. This may negatively impact their credit ratings, as their finances just aren’t organised the way that they should be. When trouble arises, it’s good to have a savings account which may be utilised in order to handle extra and unforeseen expenses. If you don’t have rainy-day savings, you may need to divert funds which should be used in order to pay down debt. So, start budgeting and try to pay yourself ten percent into savings during each pay period. Small amounts add up.
5.) Consider the Big Picture with Payments – In addition to making credit card payments on time, you should strive to make payments on time for everything, including utilities, Internet, cell phone and so on. Your credit rating reflects everything, including missed payments. If you’ve missed payments, try to catch up on them as soon as you can. Keep the big picture in mind and try to balance everything so everyone gets paid when they should. It’s about more than credit cards or other types of loans.
4.) Keep One Credit Card – Unless you’re not eligible for a credit card due to your defaulting on payments in the past, you should keep one credit card open and usable. If you don’t qualify for an unsecured credit card, consider a secured credit card. Later on, you may be able to switch to an unsecured card. If you do have credit at the moment, keep the credit card open which you’ve had for the longest. It’s not actually beneficial to have no credit at all. It’s better to have something and then make timely payments. A low balance should be your goal.
3.) Stop Moving Debt from Place to Place – A lot of people play money games, by moving their debts around from place to place. This isn’t going to help with credit repair. It’s better to focus on paying down debt and you should start by paying down credit card debt.
2.) Access Credit Counselling – We all need advice now and then. When you access credit counselling, you’ll get support from a financial expert who cares about your credit score and overall financial well-being. Community services may offer credit counselling for free, or for fees which are scaled to your income.
1.) Don’t Give Up – People overcome huge challenges in life, through grit and determination. If you’re committed to improving your credit, be sure to stick with your credit repair program. Do not give up. When you stick it out, you’ll get results.