There was a time in the country when having a credit card was as common as having a pair of shoes. This ultimately resulted in millions of people dealing with debt and now it looms over the heads of its victims like a black cloud for the rest of their lives, or until they take the necessary steps to restore their healthy credit. The following are tips that have been proven to reverse a downturn in your credit score.
TIP #1: If you restrore your healthy credit score, you will end up paying less in security deposits. Landlords and utility companies alike charge more in security deposits for customers with a lower credit score, since those customers are considered to be a higher risk for default. Of course you get it back later, but there’s no reason to force yourself to pay it out at all.
TIP# 2: To successfully improve your credit score profile, you have to change your psychological state, as well. This means creating a specific plan, including a cashflow stewardship plan, and sticking to it. If you’re used to buying everything on credit, switch to cash. The psychological impact of parting with real cash money is much greater than the abstract future impact of buying on credit.
TIP #3: If your credit profile is top-notch, getting a mortgage is a simple matter. Keeping up with all of your mortgage payments will help pull your credit score even higher. Homeownership also means you have assets that you can rely on to increase your credit score. This will be useful in case you need to borrow money.
TIP #4: If a collection agent does not inform you of your rights stay away. All legitimate credit collection firms follow the Fair Credit Reporting Act. If a company does not let you know of your rights they may be a scam. Learn what your rights are so that you know when a company is trying to push you around.
TIP #5: If disputing an account with the credit agency does not produce results, dispute it with the actual creditor. Send them a letter through the mail advising them that you do not believe that the debt is yours and request that they provide you written proof of the debt. If the account is older, chances are they will not have the records. If they cannot prove the debt they must remove it from your credit report.
TIP #6: An important tip to consider when working to restore your credit is to check your credit report from all three of the main credit reporting agencies. This is important because you want to ensure that all of the data that has been reported is accurate. Errors in your report may effect your score greatly.
TIP #7: It is a healthy credit habit to keep your credit card utilization no more than 25 percent of the total credit limit. This is important because your credit card utilization is directly responsible for your credit rating. If your balance is high, aim to bring it down to no more than 70 percent.
Never think that you cannot work your way out of less than perfect credit. By following the advice you learned here, you can begin to take the steps necessary to get those creditors off your back and to finally be free and clear of that encompassing burden, that is a low credit score.
