Things Nobody Would Tell You About Credit Repair

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How do you fix your credit when you’re broke?

That’s an interesting question, and a question many are concerned with.

Whether you’ve had major budget problems last year, or you let many credit payments slip through, repairing your credit is not only important, it’s necessary. That’s because a good credit history, rating and score will impact many aspects of your life: your insurance rates, the credit card offers you receive in the mailbox, and the interest rates paid on debt.

If you find yourself poor on credit while you’re broke, here are a few things nobody would tell you about credit repair:

 

It takes a while to repair credit history

Not paying bills on time or not paying them at all is one of the quickest ways to lower your credit score. This causes a ding in your report for a delinquent or late payment, hurting the score. While conventional advice is that making the habit to pay bills on time can improve the score immediately, not many know that it takes a lot of time to repair credit history.

The best way to improve the score in such a scenario is to set up automatic payments for all the bills. And when you’re left behind, get in touch with a creditor to work on a roadmap and device a payment plan to catch up in a few years. Also, start paying your debts – this will not only improve credit score, but will save you a lot in interest charges.

 

Increasing credit can hurt your score

Regularly using a credit card and making regular payments for more than a decade is a good thing, but it takes time to get there. As a result, you can be tempted to open up multiple accounts at once to improve your credit limit (as this is assumed to help out the credit utilization).

However, it can actually hurt your credit score because of the risk involved. There isn’t much that can be done than keeping accounts in good standing and open. Limit your inquiries to a short period of time and keep accounts to a minimum whenever you seek new credit.

 

You can miss the errors on your credit report

Even tiny errors on your credit report can cause you problems, such as rejection of a mortgage. These errors shouldn’t be kept in the category of ‘not worth sweating over’; even the slightest mistake can significantly damage your credit-rating, and have far-reaching implications. Protect your future and your credit by paying attention to any disputes.

Newer apps from Lexington Law and other companies can help you view items that have been removed from your report, regardless of your locality. Freedom to view dispute status and view your creditor actions can give you a piece of mind over the status of your credit while you’re on the go.

 

Talking to creditors can work in your favor

Picking up the phone and dialing your bill collectors and account issuers and talking about your account may get you some benefits. Collectors have to hound people in most instances, so even a little effort can go a long way. You might be surprised to know that many collectors are willing to settle old debts for quite less than the owed balance, and most are even open to negotiations.

For instance, if you have a $3,000 debt on a collection amount and you receive a notice to settle for $1,800, call the debt collector and negotiate to settle for something more reasonable. Explain your financial situation and that you want to settle the payment, but you can’t pay more than a certain figure. The worst they can do is deny the request.

 

Dedicated use of a credit card can be beneficial

If getting another credit card seems like daunting to you, ask the current issuer of your credit card to put a credit line increase on your current card. Just like when you apply for a new credit card, the action will lower the percentage of credit being used compared to how much can be used; just avoid spending more to match.

Issuers mostly grant increased limits to long-term customers, so select a card company with which you’re had the longest history with. Then pick up the phone, call the representative and remind that you’ve been a dedicated customer.

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