Most people are no strangers to credit snafus. Nearly everyone has made mistakes in their finances that led to dents in their credit report. But if you’re lucky, you realize where you’ve gone wrong, correct it post haste, and learn not to repeat your blunders. Unfortunately, some people don’t get off so easy. Some of us get in over our heads and then can’t figure out a way to dig our way out of debt. The good news is that you’re not the first to face these issues, and you certainly won’t be the last. Blame it on an educational system that includes zero mandatory financial courses. Or call out a consumer culture that’s constantly clamoring for the public to buy, dispose, and buy some more. It doesn’t matter who’s at fault – you’re the one that ends up with poor credit. But it can be fixed, and with just a few helpful tips you could restore good credit and get on track for a solid financial future.
Get a copy of your credit report. Your journey to better credit begins with knowing where to start, so order a free copy of your credit report to get started. This document not only shows you what your current credit score is, but you’ll also see black marks that are working against you. This gives you a springboard to start making changes, paying down debt, and improving your credit score. And you may even discover that there are erroneous listings that you can eliminate in order to see an instant boost.
- Check your limits and know how much to borrow. In case you didn’t know, it is possible for your creditors to make mistakes in credit reporting. For example, they might be quick to inform a credit reporting agency when you miss payments, but they might be slow to clear up black marks even when you’ve paid off your debt. In addition, they could report that your credit limit is lower than it actually is, or fail to report when your credit limit has been raised. As a result, it could look like you’re maxing out your credit when, in fact, you’re nowhere near your limit. This can cause your credit score to plummet. So make sure your reported credit limit is accurate. And when it comes to borrowing against credit lines, try not to carry more than about 30% of your limit at any given time.
- Negotiate to reduce debt. If your credit situation seems hopeless and you’ve gotten to the point where bankruptcy looks like your only option, consider asking for debt forgiveness. You might be surprised by just how much creditors are willing to knock off your total bill if you agree to a payment plan to repay the remaining debt. Medical institutions and credit card companies are just two types of institutions that are almost universally willing to negotiate debt reduction in the interest of recouping at least a portion of what you owe them.
- Get on a payment schedule. Late and missed payments can be a real problem where your credit is concerned. So if you’re having trouble sticking to a schedule, consider setting up online banking or even automatic payments to make it easier to pay your bills on time and in full.
- Get professional help. It’s not easy to improve credit, especially when you’re not entirely sure how you ended up with poor credit in the first place. But once you have your free credit report from Credit Sesame, you can hire a professional debt relief specialist to assess your financial situation and help you come up with a realistic plan to reduce debt and rebuild your credit.