Your credit score determines how much of the bank’s money you can be trusted with. If you have good credit chances are, you will be able to get the things you desire like a home, new car, or loans. There are many things that can suddenly change your credit rating.
Not paying your bills on time, losing a job, getting divorced or a long-term illness are all ways that can negatively affect your credit score.
Poor credit can affect something as simple as renting an apartment or house. No doubt, poor or bad credit can be very stressful, especially if you ignore it. There are, however, positive steps you can take to change your thinking and improve your credit score. You cannot fix what you don’t acknowledge. OK, let’s admit it; you owe people money! Now that is out of the way, let look at how to fix this.
Request a Copy of your Credit Report
Get a copy of your credit report. You would be surprised how many time the credit bureau has incorrect or outdated information listed. If there is an error, write to the bureau to challenge the error and request it be removed.
This can be done online as well. Make sure to submit proof of the error with payment receipts, canceled checks, etc. You can also contact the original creditor, and they can handle the issue and contact the bureau for you.
Make Arrangement to Pay Off Debt
Once you have a copy of you credit reports from all three agencies, compare the information. Some will have information the others do not. Examine you report to determine is all the the debt is yours and if you find mistakes, report that to the bureau to be removed.
Bring any delinquent accounts up-to-date. An account that is thirty days late will affect on your credit score. Contact the collections agency and as if you pay off the debt completely, can they remove it from your credit report. If they agree, get it in writing and pay the debt.
Dealing with Medical Bills
Work with your hospital concerning your debts. Hospitals are very motivated to work with you if you have an unpaid hospital bill. Do not ignore the bills, but contact the hospital and arrange to pay something each month. Ask what is the minimum amount you can pay
to keep you account open, and pay it. Even if it is $25, pay it on time religiously and that debt will not be reported to the bureau. Do not wait until you are overwhelmed with debt. You may be eligible for assistance with paying your bills .
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How to Let Old Debt Fall Off
When you default on a bill, and it is report to the bureau, it will remain on you credit report for seven years. This is the case even once you have paid it off. Keep a copy of that debt and the date it was reported. Collections agencies can sell you debt or re-age it. When your debt is sold, the date will be reset to the time the debt was purchased.
If you do not catch this, you will have to wait another sever years for you credit to fall off. Do not contact the collection company about this debt. If you have debt that is six year old or less, let it fall off. When that debt falls off, it will be removed from your record. Debts that fall off, help your credit score.
Get a Secured Credit Card
Why should you get a secured credit card? A secured card is a good way of letting the banks see you are redeeming yourself and becoming financially responsible. This card is only to be used as a method to improve your credit.
How to get a secured credit card
- Go to you bank to set up an account
- Decide how much you want on the credit card
- Deposit that amount of money in your bank account
Do not use it for anything other than a tool to re-establish credit. Only use about 10% of the card’s value. If you secured credit card is for 200, only put $20 a month on the card. Make you payments on time and the banks will report this to the credit bureaus positively.
A request for credit will require you credit information to be pulled. Each time a request for credit is made, it will lower you credit score. So, don’t apply for a department store, gas, furniture store credit card, until your credit score is much improved.