When confronted with bad credit, it’s easy to get enticed with the wrong kind of help. Many consumers who are stuck in serious debt problem might turn to “credit repair agencies” or “false credit counseling agencies” who promise to fix their credit fast. Sadly, dealing with these deceitful organizations can put you into an even worse situation.
The truth is, no credit counseling agency can erase bad credit. They can only help you negotiate with your creditors or give you advice on how to manage your finances. In fact, you can do by yourself everything that a credit counseling company can do for you.
However, when seeking help is really necessary, a legitimate credit counseling agency can offer tremendous support. Here are some tips on what you can do if you have bad credit:
Get a copy of your credit report. The first step in improving your credit is to check on your credit report. Make sure that there are no misinformation, inaccuracy or unauthorized charges in your account. According to the Fair Credit Reporting Act (FCRA), consumers who have been denied credit can get a free copy of their credit report from any of the major credit bureaus (Experian, Equifax, TransUnion).
If there is any error in your report, inform the credit bureaus immediately and request that your report be corrected. The FCRA gives all consumers the right to dispute false information about their credit. To learn more about disputing your credit report. Nevertheless, if there are no errors on your credit report and you really have poor credit, there are still some ways to improve your credit score.
Pay your bills promptly. The best way to improve your credit reputation and your credit score is to pay your creditors promptly. Make sure that your payments are being reported to the major credit bureaus. This practice will slowly but surely increase your credit rating in time.
Control Your Spending. In order to keep up with your debts and pay your creditors timely, create a budget plan and stick to it. If you’re a spender, it can take an enormous amount of discipline and determination to control your spending. However, if you really want to get out of bad credit, budgeting your money is a very important step.
Choose Your Credit Counseling Agency Wisely. If you’re having difficulty handling your finances, then it would be better to seek help. Find a legitimate and reputable credit counseling agency who has helped consumers build credit. When working with a credit counseling agency, make sure that you’ll be given a copy of the “Consumer Credit File Rights Under State and Federal Law” before signing an agreement.
Make sure you understand your rights and obligations as a client and as a debtor. Remember, the Fair Credit Reporting Act warns all consumers against credit repair agencies who commit illegal practices such as making false claims, manipulating information, or demanding fees before rendering service.