If you have fallen on hard times like so many other people in this economy, then there is a good chance that your credit has suffered as well. Cleaning it up is going to be very important for moving forward and rebuilding your financial life. This article will show you how you can repair your credit and get back on track.
If you can get authorized user status on a credit card account with a good payment history, don’t hesitate to do so. If you pay the bill on time, the account holder’s history becomes yours. Be aware, however, that it also works in reverse; if the account holder defaults, your credit will suffer as well.
If collection agencies won’t work with you, shut them up with a validation letter. When a third-party collection agency buys your debt, they are required to send you a letter stating such. If you send a validation letter, the collection agency can’t contact you again until they send proof that you owe the debt. Many collection agencies won’t bother with this. If they don’t provide this proof and contact you anyway, you can sue them under the FDCPA.
Now is always the right time to consider repair of your credit file. You should always practice spending and saving patterns that allow for you to constantly improve your credit. Monitor for issues, address those issues and protect your improving rating consistently. Waiting until there is an issue or need for good credit will only cost you more time and effort.
Repairing your credit can take some time, but you can hasten the process by prioritizing your debts, particularly those that are in arrears. High interest rate accounts should be paid off as quickly as possible to avoid wasting money on interest payments rather than reducing the actual balance of your debt. If you have one or two accounts with a low balance, consider paying them off in a lump sum. Once that’s done, you can have them removed from your credit report.
As hard as it may be, use manners with debt collectors because having them on your side as you rebuild your credit will make a world of difference. We all know that catching flies works better with honey than vinegar and being polite or even friendly with creditors will pave the way to working with them later. Unless you are filing for bankruptcy and absolving these bills, you will need to have a good relationship with everyone involved in your finances.
An important tip to consider when working to repair your credit is to be sure that you spread your debt around if you have multiple credit cards. This is important because it is better to have to cards at a medium or medium low balance than to have one card at a low balance and one at a high balance. Your score will suffer otherwise.
An important tip to consider when working repairing your credit is to ensure that everything in your contract is written down and signed. This goes for any credit repair transaction or any agreement with your creditor. This is important because you can never assume – just because something was said in person or over the phone – it is binding.
While there is no magic wand or special process that can ever erase all the negative things on your credit report, there are lots of ways that you can minimize their effects. Start by correcting the incorrect and start putting lots of positives on there. Follow the advice from this article and you will see higher scores and better credit moving forward.