Dealing with the complications that arise from having a less than perfect credit score can be quite stressful. It is especially frustrating when you are haunted by bad decisions from your past. It's quite challenging to rebuild your credit, but it's not impossible! Keep reading for helpful hints.
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Start by paying off credit cards with accounts 50% over your limit. You can concentrate on another card once these accounts are lowered to under half of your limit. When balances are over 50%, your credit rating goes down significantly, so try to either spread out your debt or, ideally, pay off your credit cards.
Getting a reduced interest rate is the easiest way to reduce your overall debt. An interest rate that is shockingly high can possibly be ruled as illegal in certain cases. You did however sign a contract that agrees you will pay off all interests as well as the debt. If you go ahead and sue your creditors, ask that they consider the high rate of interest.
If your debt includes large amounts for interest charges contact the debt collector and see whether you can pay the original debt and avoid some of the additional interest charges. Creditors are skirting a fine line of law when they try to charge you exorbitant interest rates. However, you signed a contract agreeing to pay off interests. It is possible that you can sue a creditor and claim that the interest rate charged is unreasonably high.
Before you hire a credit counselor, make sure that you have done your research. While some counselors are legitimate, offering genuinely helpful services, others have ulterior motives. Other options are clearly scams. A wise consumer will find out if the credit counselors they deal with are legitimate or not.
Make sure you review all of the negative marks against you on your credit report. There may very likely be errors or mistakes that can be removed.
If you are able to negotiate a repayment plan with your creditor, be sure to get it in writing. You need to have a contract in writing so if the creditor goes belly up or they change your terms, you can catch them on it. Once you finish making all your payments, be sure to send that information to the credit agencies in writing.
To keep your credit in good standing and get a better score, maintain a low balance on revolving accounts. Your credit score can be raised just by reducing your balances. The FICO system has a new level for every twenty percentage points of your credit available.
High credit card balances can damage your credit. The first step to repairing credit is to pay those balances down. Pay down your cards that have the highest interest and largest balances first. This effort will show the credit card companies that you are trying to pay your bills and be responsible.
Repairing credit is mostly done by common sense methods. The advice in this article can help you get your credit back in good standing.