Chances are that you have thought to yourself “how can I fix my credit?” at least once in your life. Living a life that is filed with the day-to-day struggles of being in debt can be very defeating and you may feel like there is no point in pushing on. However, there are steps that you can take to fix credit problems. The most important thing to remember is that you must stay positive and know that you will rise above your credit problems, and not just think you will. You will have to change your lifestyle and how you think about money, but isn’t that worth getting out from under your debt? If you follow the steps below, then you will finally be able to move forward with your life.
Step 1:
The first thing you need to do is request your credit report from a credit bureau. You may find that your credit report contains an error, and if it does you should write to the bureau immediately to try to resolve the issue. Another option is to contact your creditor that made the error on the report. Some creditors will even contact the credit bureau for you to fix the error that they made.
Step 2:
If you discover that the negative marks on your credit report are from not repaying your debts, then you need to focus on getting those paid off as fast as you can. You should organize your credit cards according to their interest rates. If you pay off the cards with the highest interest rates first, then you will be using your existing income in the most efficient way possible.
Step 3:
If you don’t think that you can pay your debts down without help, then it may be wise to get some outside help. A very popular option are to go with a credit counseling service that will help you to consolidate debt. The counselors call your creditors and speak with them to reduce or get rid of your finance charges. Finance charges are responsible for a large portion of your overall debt so eliminating them will have a big impact. A credit counselor can save you up to 40% every month so it is well worth it.
Step 4:
There are many companies that will offer to fix bad credit or will give you a debt consolidation loan; generally, you will want to stay away from these companies. Often items users of these services just find themselves in more debt than when they started. You will be able to easily spot these companies because they will use aggressive marketing tactics to try and gain your business. If you see an email offering these services then it is best to just delete the email.
Step 5:
Your next step is to close your credit card accounts and then cut up your cards so that you are not tempted to use them ever again. If you have any valuable assets it is best to sell them off to pay down your debts. You will have to downsize your life and this means that you should only buy things that your really need. Items that you cannot live without include food, water, gas, ect. If you can cut any spending out of your life then it will do nothing but benefit you.
Step 6:
Make sure you continue to pay all your bills on time. Did you know that if you miss a payment to your utility company it will show up as a negative mark on your credit report? If you pay all bills on time, keep a steady job, and try to build a savings account then you will be on your way to being debt-free.
Step 7:
After you have paid off your debt then it is time to start estab
lishing a new credit history. You will need to get another credit card. It might be best to start small, getting a department store card or a gas credit card would be best.
Step 8:
Make sure you pay down your new credit card debt each month. This will show creditors that you are trustworthy and this will be reflected in your credit report. Remember, having a good credit score will help you to get financing on important purchases in the future such as a car or a home.
Step 9:
If you are not able to qualify for a new credit card then you will have to get a secured credit card. A secured credit card is basically like a debt card. You fund the card with your bank account balance and then you charge items to the card. The card will look just like a credit card on your credit report so it is a very effective way to safely re-build your credit history.
Now that you have learned how to fix your credit, it is time to start right now. Good luck!
