If you’re suffering with bad credit, it can be hard to get back on track. Bills go into collections and this is what really hits your credit the hardest. There are a number of people that are using credit counseling and this is a great place to start. Here are a few other tips that can really benefit you and your credit.
One great place to start if you are just in over your head is with credit consolidation. These companies aim to gather all of your debt into one lump sum and divide it into monthly payments. Rather than paying each debt, you’ll be making one payment to the consolidator and they split the money between all debtors. Also, the collection calls stop which is going to be a huge relief.
While it’s tempting to use your credit cards to pay all of your bills, this can actually cost you more money. You’ll have higher monthly payments and higher interest rates in some cases. Call the companies and ask them to decrease your available credit line. This can help you resist temptation better and can help prevent any future debt.
Pay Your Bills on Time
If you’re trying to maintain your credit and increase your score at the same time, make sure you are paying your bills on time each month. If possible, pay them early to avoid late fees and to make sure they are covered. This avoids something happening and then you not having the funds available.
If you find you’re in a hurry to build up your score fast, buy something using one of your credit cards and pay back the amount to your card as soon as you can. This can show companies that you are responsible and can pay your bills on time.
The mistake a lot of people make is they buy things without considering what they need to cover their bills every month. This leads to late fees and cancellation of some services. If you don’t have enough money to pay your bills, don’t spend on anything else. Make sure your bills are paid for the month before you make any purchases.
Call Your Creditors
You might even consider calling your credit card companies and try to talk to them about making some sort of payment arrangement. Nowadays, they are more willing to work with you as long as the lines of communication are open. Rather than ignoring their calls, answer it and just explain your situation. Tell them what you can afford to pay, and 9 times out of 10 they are going to accept it as long as you are paying something.
Avoid getting any new line of credit. This opens up the door to temptation and you’ll only create more debt. The point of improving your credit score is to wipe out debt you currently have. This means when you get the offers in the mail, send them straight to the trash rather than applying.