How to Work for a Better Credit Report and Score
Being in a bad credit situation shouldn’t be a hopeless case for everyone. There is always a way to repair bad credit especially if you try to do something about it right away.
As soon as you recognize signs of bad credit- delays in payment, creditors notifying you about your bills, cash shortages- decide to bring control back to the situation. Here are the ways you can work for a better credit report and score:
Get your credit report. To work out an efficient plan to your creditors, you should personally obtain a copy of your credit report from any one of the major credit bureaus (Experian, Equifax, TransUnion). Study your credit report carefully and look for any inaccuracy or false charges.
If there are mistakes, contact your creditors and the bureau who issued your report immediately. If there are none, then take a look at the exact amount of debts you owe to each of your creditors and start working on your repayment plan.
Calculate your total debts. Start off by calculating the total amount of payment you need to submit in a month. Subtract this amount from your salary and try to
budget what’s left on your personal expenses. However, if your monthly debt payment is too large for your salary to cover, you’ll need to prioritize which of your creditors to pay first.
Prioritize debts. If you obtained a mortgage loan, see to it that you’ll be able to pay off your past due mortgage and make your monthly payment regularly. You don’t want to risk losing your home property because of untimely mortgage payments. Your next priority in your repayment plan should be debts with the highest interest rates. This way, you can keep your debts from mounting up because of additional interest imposed on you every month.
Transfer high-interest credit cards. There are credit cards that offer an introductory 0% interest rate on balance transfers. Some even last for up to 12 months or more. Apply for this credit card and move over your high rate balances so you can focus on paying only the original amount you owe. Just remember to finish paying off the charges you transferred over before the introductory period ends.
Don’t use your credit cards. If you find it difficult to juggle your monthly budget between your debts and your expenses, it’s only sensible that you stop using your credit cards for the meantime. Continuously charging purchases on your credit card will only dump you in deeper debts. Instead of thinking about spending, think about ways on how you can cut costs from your daily expenses.
Be cautious in choosing a credit counseling agency. If you really find it difficult to manage your finances on your own, then seek credit counseling. Just make sure that you’ll be working with an agency that is accredited by the government. Always remember that some credit counseling agencies may trick you into paying service fees with the promise to instantly fix your credit score. Keep in mind that the only way to boost your credit score and repair your credit report is if you can pay off the debts you owe.