Oct 01 2012
Hey I know that we don’t do a lot of how to’s and what not but you’d be surprised how many people are up to their asses in stupid debt. And having a crappy credit score isn’t helping either. In fact, have you checked your credit score lately? While you should be checking it at least once a year, many people don’t really worry about their credit score until they need a new mortgage or a car loan.
In some cases their credit score may be fine and they may qualify for the loan without any problems, but what happens when your credit score is too low and you don’t qualify for that mortgage that you wanted so that you could buy your dream home? That could be incredibly disappointing.
Save yourself the grief by monitoring your credit score on a yearly basis and by doing everything you can to repair your credit score.
Here are some suggestions to get you started….
Check for Errors
Review your credit score report and look for any errors. Things to look for are old debts that you have paid off, but have never been removed from your report. Also, look for debts listed on your report that are not yours. If you identify any errors, contact the credit bureau and ask for their assistance in resolving the errors in your report. Once the errors are corrected your credit score will begin rising again.
Are you in a situation where you owe money on a loan or credit card but have stopped paying due to financial issues? If yes you will see that your credit score report has been negatively affected.
You should work at clearing up unpaid accounts as quickly as possible. Contact the financial institution that holds your loan and ask them if you can restructure your payment plan with them and if they could possibly reduce your interest rate. Be polite and ask to speak to a manager if the first level of support is not very helpful.
Pay Close Attention to Due Dates
Your overall credit score is calculated based on several different factors. 35% of your credit score is calculated based on late payments. Any time you miss a payment or pay late, your financial institution automatically reports that to the credit bureau. A late payment automatically reduces your credit score. Remind yourself to pay each debt at least 7 to 10 days prior to the due date.
Outstanding Balances Can Really Drag Down Your Credit Score
Did you know that up to 30% of your credit score is based on your ratio of debt versus the amount of credit that is available to you? This is on a per loan basis. The outstanding balance on each credit card should not be more than 30% of your credit limit. Therefore you are better off to have several credit cards with no more than 30% debt on each, instead of having one large credit card that is maxed out. The quicker you can reduce your outstanding amounts on all of your credit cards, the better your credit score will be.
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