Consumer Info Now - Bad Credit

Can bad credit be fixed?

Bad credit is a negative term that is given by the credit rating agencies. It is used if you have missed or defaulted on a payment over an extended time period; you are then considered as a bad credit risk by the financial companies. Once you get a label for bad credit, it is difficult for you to arrange for loans and other finances and usually means more rate of interest on any loan tat you have taken. Whether the non payment is done purposely or due to some financial crunch, the result is the same – a negative rating.

However, don’t fret! No matter how bad your credit is, you can take steps to make it better.
► Try to pay your bills on time. If you make late payments (in cases when the payment exceeds one month or even more), there are chances that you will get a negative credit rating.
► Try and use as few credit cards as possible. You can write to the credit card issuers requesting them to close your accounts; also inform the credit rating organizations about this change. Remember less number of credit cards will mean less amount of credit and thus less hassle about making timely payments.
► Avoid bankruptcies, tax liens and collections. If you have filed for bankruptcy, the data is recorded in your credit report for 10 years; collection accounts and paid tax liens stay for up to a period of 7 years and unpaid taxes will remain forever.
► You can also request your credit lenders to lower your credit

amount. The total amount of available credit is also considered by the issuers even if you owe nothing.
► Finally check your credit report every year to check if there are any inaccuracies.

Avoid false credit repair claims:
So, if your credit report gives you a negative rating, only paying back the loans on time will be able to help you in fixing it. If you get calls or mails from companies claiming that they can ‘fix your bad credit rating” with a charge, don’t get duped. These are false declarations and don’t get fooled by paying them money.
 

Can my bad credit rating be fixed?
You can definitely improve your bad credit rating; all it takes is a positive approach and correct usage of your finances. Discussed below are a few steps which might be helpful in solving your problem to a great extent.
► Request for a copy of your credit report from a credit bureau. Your credit report will be sent to you free of charge. If you notice any incorrect information, please write to the bureau for corrections.
► If you get a negative rating due to the non payment of some outstanding debts, clear them as soon as possible. Start by paying the ones that have the highest rate of interest.
► If you find it difficult to manage your debts or they are huge, seek advice from a non profit credit counseling agency. The counselor can work out a debt consolidation plan by helping you to secure your loans and contacting your creditors on your behalf to reduce or even eliminate finance charges. This step can actually bring down your monthly payments by almost 40%.
► Do not be taken in by companies that provide “debt-consolidation” or “credit-repair” loans. These services will only put you in more and more debts.
► Once you have paid back your loans and debts, apply for a new credit card and build a good credit history.
► Use the credit card responsibly. Pay off all the loans and your monthly credit card bills promptly to maintain a good credit record.

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