IMPROVE CREDIT RATING

Many of you might be stressed out about your impending bad credit. Bad credit is not only about late or missing payments to your creditors, it also involves the circumstances involved. Besides the financial crunch that led you to bad credit there is also the mounting pressure from the collection agencies, courtesy the creditors.

Let me take you to a step by step guide on fixing bad credit:

Step 1: Payments on time

One of the most fundamental ways to avoid or fix bad credit is to pay all of your bills on time. Late payments or missing payments have a negative effect on your credit rating; and consequently lead to bad credit history. Payments are considered to be late and as bad credit if they are made 30 days late or more.

Step 2: Improve credit scores

Now that you know that you have been into bad credit, get set to improve credit scores. The first priority in this case is to get the late bill current immediately. Because, the longer you are behind on any debt, the more damage you are doing to your credit score.

Step 3: Reduce number of credit cards

Another, intelligent way to fix bad credit is by reducing the number of credit cards you carry. You can do this very easily, by writing to your creditors, or the credit card company issuing them and requesting to close your accounts. Then of course, make sure that you report this status change to all the credit reporting agencies.

Step 4:Reduce credit card limit

You can also keep a check on your credits and fix bad credit by sending a written request to your creditors or credit card company to reduce the credit limits on your accounts. This will not only help you lower your amount of available credit, but will also prevent you from facing unnecessary hassles and stress of bad credit.

Step 5: Avoid bankruptcies

Always keep in mind that the worst in bad credit is bankruptcy. Because, a bankruptcy stays on your credit report for up to 10 years; making you ineligible for future borrowings. Therefore, always make sure that you avoid bankruptcies, collections and tax liens.

Step 6: Re-establish credit with a co-signer

You may ask a family member or a trusted friend to co-sign on a small loan or credit card to help you re-establish credit. However, make sure that you make your payments on time. Remember, when you have your relative or a friend co-sign on a loan or credit card, that person’s credit will also be affected by your payment history as well.

Step 7: Re-establish credit with a secured credit card

The most implemented procedure for fixing bad credit is by getting a secured credit card to help reestablish your credit. However, make sure that you have a designated amount of money in an account that will be sufficient to cover your charges. Also, make sure to make your payments on time.

Related links:

FREE copy of Experian credit report

Equifax Triple Protection Watch