One Great Way to Fix Your Credit
Get out of debt [http://www.mycreditgroup.com/debt/]. Can you think of a better way to fix your credit? If your credit's bad, it's because at some point you were unable to pay your dues. And until you finally take care of business, you're going to have a bad reputation with lenders. It may be a challenge. It may seem complicated. But getting out of debt is possible, and if you want to earn back that trust and establish new credit then you're probably going to have to do it.
Baby Steps
Viewing your credit problems as a whole can make you feel overwhelmed. But dividing your project into a series of lesser challenges ensures a higher rate of success, and you'll see yourself moving toward better credit with every small effort. Rome wasn't built in a day, and neither is good credit. Remember, a great way to get big results is to start small.
So if you're ready to begin, the first step you want to take is
finding out what you're up against.
What's on your Credit Report?
If you're like most people, you probably have at least one negative item on your credit report-or more. Late-pays, charge-offs and collections are all common marks found on reports. It simply means that you either paid late or you didn't pay at all. When lenders, utility companies and other services see marks like these, it tells them that you probably won't pay your bills. And if you want to make things right, get your credit report and start figuring out who you owe-you're going to be contacting them.
Disputing Negative Items
Credit bureaus make mistakes. In fact, you may find that your very own credit report is practically smeared with inaccuracies. Carefully research the dates listed for late-pays. Are they accurate? Are you certain you paid on time? What about your collections? Are the amounts valid? Is the debt even yours? Even if you're not sure about a certain account, or something seems suspicious, there's a good chance someone has made a mistake. And if that's the case, it's your job to track them down and have it resolved. And you can do that by sending a dispute letter.
A dispute letter informs the reporting agency that you've found a mistake on your credit report and you want it removed or corrected. It's their job to validate the debt-and they only have about 30 days to do it. If they are unable to validate, they're obligated to make the appropriate adjustment to your credit report.
Settling your Debts
Once you're sure that your credit report is accurate, it's time to figure out exactly who you owe and how much you owe them. These are the accounts that are hurting your credit the most. If there's any hope in cleaning it up, you're going to have to make some negotiations.
Come up with dollar amounts for each debt. Is it possible to pay them off in full? If not, your next step is to try to have the debt lowered to an amount you can afford. And this usually works pretty well. Your creditors have already written you off as a loss to the company. Anything they're able to collect is a bonus. In fact, some creditors are willing to resolve your debt for just pennies on the dollar. With a strong negotiation strategy, you'll see that paying off old debt is much easier than you thought.
If a reduced balance still doesn't work for you, you're going to really have to budget and start saving. You may even need to pick up an additional source of income. But such measures are only temporary. The more effort you put into paying your dues, the sooner you'll be debt free and in the right position for a total credit rebuild. Just focus on one account at a time-baby steps.
The Results are your Reward
If you can manage to correct your report and pay off your debts, you'll notice an immediate increase in your credit score. That's when you are in the prime position to establish new, positive lines of credit. Lenders will no longer consider you such a high risk because even though your credit shows some negative history, it will also show that you've been working responsibly to fix your mistakes. And that says a lot.
So if you're tired of being bogged down by a low credit score, go to the source of your problems-old, unpaid bills. With the right attitude and a little effort, you'll see how getting out of debt truly is one of the most rewarding ways to fix your credit.
Baby Steps
Viewing your credit problems as a whole can make you feel overwhelmed. But dividing your project into a series of lesser challenges ensures a higher rate of success, and you'll see yourself moving toward better credit with every small effort. Rome wasn't built in a day, and neither is good credit. Remember, a great way to get big results is to start small.
So if you're ready to begin, the first step you want to take is
finding out what you're up against.
What's on your Credit Report?
If you're like most people, you probably have at least one negative item on your credit report-or more. Late-pays, charge-offs and collections are all common marks found on reports. It simply means that you either paid late or you didn't pay at all. When lenders, utility companies and other services see marks like these, it tells them that you probably won't pay your bills. And if you want to make things right, get your credit report and start figuring out who you owe-you're going to be contacting them.
Disputing Negative Items
Credit bureaus make mistakes. In fact, you may find that your very own credit report is practically smeared with inaccuracies. Carefully research the dates listed for late-pays. Are they accurate? Are you certain you paid on time? What about your collections? Are the amounts valid? Is the debt even yours? Even if you're not sure about a certain account, or something seems suspicious, there's a good chance someone has made a mistake. And if that's the case, it's your job to track them down and have it resolved. And you can do that by sending a dispute letter.
A dispute letter informs the reporting agency that you've found a mistake on your credit report and you want it removed or corrected. It's their job to validate the debt-and they only have about 30 days to do it. If they are unable to validate, they're obligated to make the appropriate adjustment to your credit report.
Settling your Debts
Once you're sure that your credit report is accurate, it's time to figure out exactly who you owe and how much you owe them. These are the accounts that are hurting your credit the most. If there's any hope in cleaning it up, you're going to have to make some negotiations.
Come up with dollar amounts for each debt. Is it possible to pay them off in full? If not, your next step is to try to have the debt lowered to an amount you can afford. And this usually works pretty well. Your creditors have already written you off as a loss to the company. Anything they're able to collect is a bonus. In fact, some creditors are willing to resolve your debt for just pennies on the dollar. With a strong negotiation strategy, you'll see that paying off old debt is much easier than you thought.
If a reduced balance still doesn't work for you, you're going to really have to budget and start saving. You may even need to pick up an additional source of income. But such measures are only temporary. The more effort you put into paying your dues, the sooner you'll be debt free and in the right position for a total credit rebuild. Just focus on one account at a time-baby steps.
The Results are your Reward
If you can manage to correct your report and pay off your debts, you'll notice an immediate increase in your credit score. That's when you are in the prime position to establish new, positive lines of credit. Lenders will no longer consider you such a high risk because even though your credit shows some negative history, it will also show that you've been working responsibly to fix your mistakes. And that says a lot.
So if you're tired of being bogged down by a low credit score, go to the source of your problems-old, unpaid bills. With the right attitude and a little effort, you'll see how getting out of debt truly is one of the most rewarding ways to fix your credit.
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