Having credit problems is certainly not fun, but there is no reason to panic. There are real, effective ways to improve your credit score. You don’t need to pay for an expensive credit repair service either.
Some of these tips take time, and require that you change some of the bad financial habits that caused your credit problems in the first place. Change isn’t easy for some people, but if you don’t change, you’ll just end up with the same issues very quickly. So learning how to keep your credit in good standing is an important part of the process.
Other tips take some work, but are well worth the effort. They involve contacting your creditors and getting your past problems removed from your credit report. If you listen to the experts, then they will tell you that this isn’t possible. But take it from someone who did it – you can improve your credit score, and you can do it legally and ethically. You just need to know how to do it.
Here are 5 simple tips that will help you boost your credit score:
1. Start paying your current bills on time.
A lot of people underestimate the importance of paying their bills on time when it comes to boosting their credit score. This is something that you can easily control all by yourself. Of course, sometimes money gets tight, and paying your bills is difficult. Or sometimes you just forget. Either way, give your creditors a call to discuss your options. And if you tend to be forgetful, get yourself organized so you have a system for paying your bills on time. Keep a list of all your bills, and when they are do, and check it once a week. Before long, you’ll be in the habit of paying on time. And knowing when your bills are due this makes managing your money easier too.
2. Keep low credit card balances.
This is another big factor in determining your credit score. Even if you’ve never paid late, huge outstanding credit card balances can negatively affect your score. And maxing out on your credit cards can cause your score to go down even further. Of course, this is easier said than done as you watch your balances grow bigger and bigger. Prevention is much more effective, but sometimes life events cause you to get into financial trouble. If you can’t get out of debt by yourself, then hire a debt relief program to help you. Either way, you won’t get out of debt overnight, but every little bit helps, and if you stick with the program, eventually you’ll become debt-free, and your credit score will improve.
3. Put your credit cards in a closet.
Or a safe deposit box, a drawer, or anywhere that you won’t see them. Keep one in your wallet for emergencies. But the rest should be hidden somewhere safe. But shouldn’t you just cut them up and close them? In most cases that’s not the best idea. Having credit is not a bad thing. And if you have a lot of debt, then closing accounts won’t help anyway. In fact, having credit is usually a good thing. Because if you have a couple of credit cards, with no or low balances, then it actually helps your credit score. And if you’ve had one for a long time, that’s good too. So just put your cards away, and once you pay them off, then they’ll help your credit score.
4. Delete errors from your credit reports.
If you watch the financial experts on TV, you’ll hear most of them tell you that you can’t get your credit problems removed from your credit report unless you wait 7 years. But that’s not entirely true. Sure, over time the problems will automatically fall off your credit report. But you can get them removed faster, if you know how to do it. Basically, you just need to contact your creditors and ask for written verification of each negative item. If they can’t then legally they must remove it. Quite often, either they can’t, or they just won’t. It might take a few tries. And you need to be careful not to say too much (otherwise you’ll give them the proof they need). But this strategy does work. Start by getting a copy of your credit reports from the three major credit bureaus. Then look for errors, and dispute all the errors. Then when this is done, go for the bad stuff. A simple letter will work. Just keep a record of everything you do, and be prepared to keep trying.
5. Avoid filing for bankruptcy or foreclosure if at all possible.
There is a time and place for bankruptcy. But if you can pay your bills, then pay your bills. Same with foreclosure. If you are hopelessly behind, then sometimes it is best to let the bank take your home. But if you can pay your mortgage, then pay it. Because both of these can stay on your credit reports for at least ten years. So if all possible, it is best to avoid these options.
Struggling with credit problems can be very embarrassing. There’s nothing worse than being denied for a loan, or having your charge denied at the cash register. But you are in control of your own credit. Your credit score simply reflects your choices. If there are errors, then do your best to fix them. Otherwise, your best strategy is to gain an understanding of how you got into trouble in the first place, then follow these tips to fix your credit problems for good!
This article has been provided by www.cpastudyguides.com. Learn tips for passing the CPA exam, and read about the top study guide, the Yaeger CPA review course.
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