Credit is a better projection of your financial status and how much efficient you are at managing the same. If it is not up to the mark, you will have to struggle hard to get a loan, no matter what purpose you are seeking it for. Rebuilding credit is a time consuming process but paying attention to credit score improvement is an obligation if you want to obtain loans with low ceiling interest rate. Here are 10 simple ways to restructure your credit.
Unless and until you know what your credit report contains, it is not possible to map up an improvement plan. Federal law allows you to get a copy of your credit report from each of three credit agencies – Experian, Equifax and Trans Union. It is important that you thoroughly review your credit report for any inaccuracy. The agencies take best care while preparing one’s report, however, the possibility of erroneous entries should not be set at naught. If others’ late payment or dues have been registered against your name, your credit ranking will slide down further. Why should you pay for others’ delinquency or default? If on checking, you find any inaccuracies, immediately report to the credit agency for the removal of those particular entries.
To better your credit, it is obligatory to start with a budget plan. Tracking your expenses for 30 days at a stretch will help you understand the pattern of your take home income distribution. Are you spending much on leisure activities? Curtail the cost for that purpose. You may shift the cut back amount to necessity buy or debt payment.
Give a call to your creditors as soon as you realize that it is nearly impossible to clear their dues at one go. Make a budget and determine how much you can afford to pay. Most of the creditors will agree to a smaller payback rather than getting nothing at all.
Once the lenders give you verbal promise regarding lower payment, balance payback, interest reduction etc., ask for confirmation via email or writing. This is a safeguard against loss of data or change of mind or some other factors. After the debt burden is cleared off, ask for a letter of settlement so that you can send a copy of it to the credit bureaus. Make sure that your credit report is updated from time to time.
If you have a large balance on your credit card, convert it into a low or zero interest loan till the dues are not cleared in full.
Close the credit accounts which are no longer or seldom in use. Keeping multiple credit accounts open with zero balance on most of them lowers your credit points.
Obtaining a secured credit card is very important. You must know the interest amount and other fees that come with secured credit card. Never fail to make scheduled payment to avoid penalty charges.
Addition of several good credit accounts and deletion of a single bad credit account increase your credit standard by 80 points.
Keep yourself away from bankruptcy filing as it will stay in your report for at least 10 years.
Joining a credit union is also a good idea to realize your ambition of credit rebuilding.
There are several secondary tips to help build your credit from ground zero level. Following all of them – if you can – won’t be a bad idea for a comparatively immediately result.