January 3, 2011

Repairing Your Credit

Repairing your credit is something we all have to do from time to time. It may appear like a hard task to do, but the fact is that it can be fairly easy when you follow these five simple guidelines to repairing your credit and getting back on track for a future with easy credit options.

Pay your bills on time.

A full 35 percent of your credit score is made up of your payment history, meaning it matters more than anything else. Hence, it is incredibly important that you pay back your bills on time and do not let them get late, or go to collections. One late bill can send your credit score spiraling down. This is why it is so important that if you are repairing your credit, to pay your bills. Even if it means minimum payments, you should pay your bills as soon as you can without letting them be late.

Pay and Transfer

Pay off your high interest credit cards and transfer balances to your low interest credit cards. Interest can sink you when you are trying to pay your credit cards, so transfer your high interest balances to low interest cards to save money. As well, if you have more than three credit cards, close out the high interest cards to get yourself down to two or three credit cards, no more.

Credit Report

Get a copy of your credit report. Understanding your credit report is key to fixing your credit. It will show you what to fix and what to not worry about. On top of that, it will help you see if you have any problems with errors on your credit report, something that affects 75 percent of all credit reports. Repairing a credit report error can drastically fix your credit, so make sure you get your credit report.

Don’t spend.

The smaller amount you spend on credit, the less you have to pay back and the easier it will be to start cutting down on your debt. You should try and limit all your everyday expenditured and create a budget so you can observe yourself and see accurately how much you need to allocate each month to pay off your debts in a year or so.

Financial Accountability

Talk to someone about your debt. A credit counseling company will take all your debts and put them into one loan that is easier for you to pay back. A credit counseling company will help you learn more about your credit and how to fix it. You won’t be so worried because you will have these companies on your side, helping you fix your credit. Just be careful of debt consolidation and debt counseling companies that are not legit and only want your money. Do your homework.

These five tips can help you repair your credit and get yourself out of a debt spiral. Use these tips and before you know it, your credit will be back up above 650, and you will be living a much easier life again.

Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

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