If you’re suffering from a poor credit score, you’re not in a hopeless situation. Here are the positive steps you can do to improve your credit score:
Check your credit report. Incorrect charges and negative remarks may be the reason why your credit score is low. Obtain a copy of your credit report from the 3 major credit bureaus and check each one for accuracy.
In case of errors, don’t hesitate to notify your creditor and the credit bureau by sending a letter of dispute. Once these errors are corrected, your credit rating would also improve.
Improve your credit-to-debt ratio. If you often use your credit limit to the full, your credit score can suffer. To increase your credit score, pay off your existing debts and avoid incurring new charges. Experts recommend now using more than 50% of your credit limit. Ideally, you’ll want to stick with just 30% to 40% usage while leaving the rest of your credit free.
Negotiate with creditors. Negotiate with your creditors and request for a new repayment plan. Let your creditors know that you’re not backing away from your obligation and that you are genuinely concerned about protecting your personal credit history against bad debt. Most creditors are willing to work out an arrangement than to see their clients file for bankruptcy.
Create your personal debt repayment plan. To ensure that you’ll be able to keep up with your repayment, you should set your own debt repayment plan and stick to it. Remember, the only way you can improve bad credit history is to get off from debts. Therefore, repayment should be your top priority.
Check your accounts regularly. Keeping track of your accounts would help you become more aware of your spending and payment schedules. If you’re having trouble remembering all your due dates, you may tie up with your bank and arrange for an automatic payment system. For your credit card debts, consider getting a zero APR balance transfer credit card.
This type of card allows you to transfer over your balances from other credit cards and pay them off with no additional interest costs. However, the 0% APR would not last forever so make sure that you can complete your payments before the zero interest introductory period ends. It is also wise to find a balance transfer card that maintains a reasonable APR even beyond the introductory period.