Do not allow bad credit to frustrate you. Sometimes, you do not even know you have bad credit until you are denied of credit. When you find out that you have bad credit, do not let it bother you too much. You only need to take action and you can get your credit to where you want it to be in six to seven months. Fixing your financial situation is a process that helps you to increase your credit score. You can fix it on your own or call for help from an agency that specializes in fixing credit. Here is how to do it on your own.
- Evaluate your financial reports
What you should do first is to figure out where you stand. Your credit reports will tell you the extent of the damage. You should check the major credit unions: Equifax, Experian, and TransUnion. Scrutinize all three because the items on each report may be different. At most times, items reported on one report may not be reported on the order one. Even if one item is reported on all three, there may be some discrepancies.
- Dispute Errors
Check the credit reports for accuracy. Start check from your personal data on the reports. Make sure that your personal information is correct. You should also check to make sure all credit accounts, as well as loan entries, are yours. Make sure you verify that all payments reported as late or missed payments are actually missed payments. Check the items reported under major purchases and confirm if you really made those purchases.When you find any errors, make a copy of your credit report and highlight the error. Another error is items that are supposed to be taken off your report that is still there. For instance, your bankruptcy information that is supposed to be taken off your report after seven years is still on it. All these counts as errors and should be removed from the report. Make copies of anything that can be used as evidence. These include bank statements.You can next file a dispute to the credit reporting agency with all the information you have gathered. You will need to submit a certified letter detailing the errors. You can file the dispute online or mail it to the agency. Even though it is easier when you submit online, it is more effective when you submit the dispute by mail. After submitting wait for up to 45 days. The credit reporting bureau has up to 30 days to respond to your claims but allow up to 45 days.They will respond to your dispute within that period. They will launch an investigation into your credit report. They will contact the information provider to demonstrate the truth of the data they have provided. If it is established that there are lapses in the data they issued, actions will be taken to eliminate these errors from the report. When they inform you about the outcome of the dispute, you can also request that they submit a copy of the report that highlights the changes made to all organizations that checked your credit report in the last six months.
- Stop Accumulating more Debts
It is also necessary to spend cautiously. It will not be helpful to your situation if you keep spending more than what you can afford. You can adopt certain tactics to help you to reduce spending. One of these includes the cautious use of the credit card. If possible, do not take your credit cards along to places you are likely to make impulse purchases. You can switch to cash use and hide your credit card. When you do that you will not be tempted to make certain purchases. you should also adjust your lifestyle and cut down on certain luxuries. You can reduce the number of times you visit certain restaurants.
- You Should Also Pay Down Your Balances
You should check your debts and plan how to pay them off. Begin to consistently pay off your debts by paying off the high interest ones first. Some debts weigh more on your credit score than others. Medical bills don’t necessarily give a negative impact on your credit rating. Hence, pay off other debts before moving on to the medical loans. when you are making payments, try to make full payments. You should consider paying down balances of cards that are almost maxed out. Doing this will reduce your credit utilization ratio and improve your credit score.
- Be an Authorized User
You can also ask a friend or relative to include you as a certified holder on their card. The person you will do this with should have a good financial standing. He or she should be someone who makes regular payments for loans and credit cards. When the person adds you, it will automatically reflect on your report. You can then benefit from the person’s good credit history. When you want to do this, it is important to select someone you are sure will not stop making payments. This is because, when the person makes stops payments, you will also be affected. In the same way, when you continue to accumulate more debts without making payments, the person will be affected.
- Consolidate Your Debts
If you can’t pay your premiums every month for the loans you have taken, you can consider debt consolidation. With debt consolidation, you will get a new loan at a lower interest to pay off all your previous debts. When the loan consolidation is complete, you will be making lower monthly payments. You will also be making single payables at monthend. You should try to make your payments monthly to ensure that your debt is cleared bit by bit.
- Evaluate your financial reports
When you do all these, remember to keep track of your credit. Make periodic checks on your credit report to see the changes in your score. You should also note that credit consolidation can take time. Even if you are not seeing results from the onset continue and you will eventually see results.