By Brice Hogan
I have been thinking about this topic for a long time seeing as most people, including myself, have been in a situation where your credit isn’t the best and you’re struggling on the best way to fix it. The problem is most people are in debt and trying to live with out having the proper amount of income coming in and this situation can turn us to more debt and then eventually there are maxed out credit cards and you can’t afford to pay the creditors. At that point you just want to give up. Well, there is a way out of the mess.
Clear up any issues on your Credit Report
Every one has a credit report. It is your history of your relationships with your creditors. But here is an interesting fact most credit reporting agencies do not have an accurate report due to the lender sending in a transaction with inaccurate information. This is very common. The best way to go about clearing up the situation is to send a letter or go to their websites and find out the best way to challenge the report. Some important things to do with your credit report:
Regular Check up. Get a Free Credit Report every 4 months. But your saying I only get one free credit report per year. Wrong. You get 1 free credit report per year from each credit reporting agency. So you cam actually get a free credit report every 3 months. Go to www.annualcreditreport.com for more information. By checking your report you can look for errors or look for any identity theft or. If you see an incident of fraud notify a reporting agency immediately so the appropriate steps can be taken.
Understand Your Debt
Credit card debt is a tricky thing and so you really need to know how much debt you have in order to figure out an avenue to help you pay the debt off. According to the Consumer Federation of America, more than 80 percent of all households have some credit card debt. Of them, the average debt is $12,000. And 10 to 15 percent of households with credit card debt are barely able to pay it off. So here are some basic rules to follow in order to decide what you need to do with your debt:
· If you have enough to pay all your bills do it yourself. A good easy way to do this is set up a bill pay that way all your bills get paid on time.
· If you don’ have enough to pay the bills but do have enough to go through debt management use this avenue. The National Foundation for Credit Counseling is a good place to find your local non-profit credit counselor.
· If you don’t have enough for debt management, but you would like to avoid bankruptcy, consider debt settlement.
· Once you have exhausted this avenue the remaining option is bankruptcy.
3. Make your payments on time
If you are going to re-build your credit it is essential to make your payment s on time. This part of your credit report is the most heavily weighted. It accounts for 35% of your report so keeping your payments current is absolutely essential. If you do this over a 1 to 2 year period you can see a dramatic change in your credit score.
4. Don’t Max out you total Balance
This basically means not max out your credit cards or even come close. The reporting agencies frown on this big time. Generally the rule is to keep your balances on your credit cards about 25% of the available balance. So if you have limit of $1000 try not to put more than $250 on the card.
Build it over time
10% of your credit is how long you have had it. Which means it is important to the previous steps, but also if you have credit cards that have zero balances that you want to close to keep them open so that over time it reports better on your score.
Be sure to implement these steps so that you are able to maintain clean credit. By doing so can ease your financial situation and obtain low borrowing rates when you need it in the future.
No comments yet.