Best Ways To Handle A Credit Score Drop – Part 2

Credit Cards 0 11

Before agreeing on settling a debt, find out how if the process will raise or lower your credit score. Do some heavy researching before starting an agreement with any creditor; there are other options that may not damage your credit score as heavily. Creditors are only trying to get the money that you owe them and could care less how that hurts your credit score.
 
If you are able to negotiate a repayment plan with your creditor, be sure to get it in writing. Having documentation is important for your records but also protects you in case a creditor changes their mind. Finally, when it is paid in full, get documentation thereof to submit to credit agencies.
 
Take the time to carefully go over all your credit card statements. Look for any changes that have happened, and make sure they are correct. You do not want to end up paying for a purchase that you did not make. You are responsible for the accuracy of information on your credit card statments.
 
Reducing the outstanding balances on some of your credit cards can improve your credit rating. Your credit score can be raised just by reducing your balances. When balances are 20, 40, 60, 80 and 100 percent of the total credit available, the FICO system takes note of it.
 
Try to avoid using credit cards. Use cash to pay for things whenever possible. When you do use a credit card, pay off the balance in full each month.
 
Debt collectors are an intimidating and stressful part of dealing with bad credit. Remember that when dealing with harassing collection agencies, consumers have the option to issue a cease and desist letter to stop the harassment. This doesn’t let the customer off the hook for the debt, it merely stops the threatening calls.
 
The only way to repair credit is to be more responsible with your credit accounts. Prepaid credit cards are one way in which you can repair your credit. These cards are used like a normal credit card and are reported to the credit bureaus; however, you can only use the amount of money you deposit into your account. Potential lenders will see that you are working towards becoming more responsible with your credit.
 
Whenever you apply for and open a new credit account, your credit score may drop. Resist the urge to sign up for credit cards even when they promise you instant savings at the checkout. This is important because every time new credit is obtained, your credit score suffers.
 
If you are unable to make minimum payments, contact the better business bureau for information on a trustworthy credit counseling service. These services will help you communicate with creditors to make a simplified payment arrangement that will help you in the long-term. Credit counseling can be a key piece in helping you understand how to budget your salary and pay your bills.
 
Any person who needs a loan or line of credit to make home repairs, start a business or send their kids to college will need to have a good credit score. Even if you have bad credit, things are not hopeless. Read the tips presented here to help improve your credit scores.

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