6 Ways to Fix Credit
Many people now a days find them self in some deep debt. Heres 6 ways to fix credit and get the credit you deserve. Credit can help you one day buy the car, house, or business loan that you need. Unfortunately for some renters you can’t get past a credit check to rent.
Stop Paying with Cash! –
The first thing you want to do is make sure that you have an established line of credit. If you know your credit is below 600, get a secured card. A secured credit card is a credit line that is started with a down payment that you will get back once you qualify for an actual credit card.
Sign Up for Credit Karma-
Credit Karma is a secure site used for checking your credit reports for Transunion and Equifax online. This is probably one of my favorite tools! When I was working on my credit I’d check this every other day. Credit Karma will show you what open accounts you have, what is in collections, the percentage of utilization of your card, and what credit cards would be best for you.
Collections impact your score dramatically! Clear up collections slowly, attack your largest debt first. Try disputing your debt, a credit agency has 30 days to answer or prove your account. If someone lets it slip at any point it comes off of your report! And you can do this every 30 days. If that doesn’t work because you really do owe a medical bill for $4,000 then call the agency and hit them with the lowest payment possible as an “offer”. They have to take your offer, now they can decline your offer however but it’s worth a shot! Some agencies will take a significant amount lower for your debt just to settle the balance. Be aware that paying off collections may not take them off your report.
Stop signing up for new credit cards! Stick to one or the ones you already have! Credit cards or any line of credit will run your credit and place what’s called an inquiry. Inquiries will lower your credit score if you have to many on your report. Credit inquiries will stay on your report for 24 months (two years).
Reduce Your Amount of debt-
Reduce the amount of debt you owe this is your largest credit impact. The first thing you need to do is STOP using your credit cards. Continue to make regular payments on all accounts to keep active payment history. Start to pay off the highest interest card first. If you can double your payment on one card until this card is paid off. Another easy way is to keep a budget for your cards. If your card payments total $600 and after you pay a few off or pay some debt down and your payments start to get lower, keep paying the $600.
Now that you have reduced your debt, disputed accounts in error, and started a line of credit to show a credit history you’ll want to maintain a budget. Keep money aside in your savings account at least two months worth of your bills. Doing so will keep you from wanting to use your credit card. Your credit card should never exceed 30% of its credit limit. Keep up on payments.