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Today’s guest post comes to us from Charles with Credit Donkey.
6 Overlooked Tips to Repair Your Credit
Your personal finance journey begins with your credit score. A bad credit score can seriously limit your quality of life and should be avoided at all costs. Not only is your credit score responsible for whether or not you can qualify for a loan or credit account, but it will also determine how much you will have to pay for the loan in terms of interest payments.
Because credit plays such an important role in our society, it is important to make sure that your credit is in top shop shape. If you have had some credit challenges in the past, here are 6 overlooked tips to repair your credit:
Do not wait to repair your credit
Waiting to repair your credit is a bad idea. You should pay your down your debt first and find out ways to rebuild your credit. A time will come when you will need a higher credit score as well as a credit report free of delinquencies so don’t wait to repair your credit. Commit to getting started today.
Do not close your older accounts
A mistake that most people make while repairing their credit is that they close their older accounts. You should avoid doing this even if you are not using them. The reasoning behind this is because your credit score takes into account the length of your credit history. By closing your older accounts you simply lose a very important part of your credit history which will play a negative role in your credit score.
Do not close your revolving accounts
If you are planning to close any revolving debt accounts that you may have, you need to first take into account your other revolving accounts that will remain. The reasoning behind this is because a large portion of the credit score is determined by your debt-to-the-available-credit ratio of your revolving accounts. By closing a revolving account, you will lose any access to that credit line, thus altering your available credit ratio and possibly having a negative effect on your credit score. If you want to stop using a credit card then it may be in your best interest to simply stop using it as opposed to canceling it.
Do not charge more to your credit account
If you think charging everything to your available credit accounts will improve your score, then you are greatly mistakened. Generally, individuals with the highest scores are fiscally responsible and do not over leverage themselves with credit.
Always correspond through registered mail
While corresponding with your creditors, it is necessary that you do so via registered mail. In the event that something gets misreported on your credit report, it is critical that you have a written account of any correspondence between you and your creditor.
It is really important to repair your credit in an organized and structured manner. You should make sure that you get all of your credit reports regularly in order to assess what strategies are working for you.
Following these simple tips for repairing your credit will take some time before you begin to see the fruits of your labor. However, implementing these strategies will hopefully get you in the habit of performing these fiscally responsible tasks on the regular basis.
How about you all? Have you tried repairing your credit? How did it turn out? What techniques and/or strategies did you employ?
Share your experiences by commenting below!
Jacob’s Thoughts – Listed below are my random thoughts as I was reading this article.
- @Getting started today – The best way to get started reducing debt and repairing your credit is to collect your debts by making a list of all accounts, the APRs, and total balances due.
- @Revolving accounts – What is a revolving account? Does any one know? Is this just a credit card account?
- @Registered mail for correspondence – This is a great idea! And, one that I hadn’t explicitly thought of. Things do get lost in the mail, so you want to make sure you affairs are insured.
- Another tip that goes along with this is to make a detailed record of all interactions (emails, phone calls, etc) with the company that administer your debt accounts. This ensures that you know who to go to and blame in the event that a mistake is made.
***Photo courtesy of http://repair-credit-easily.info/repair-credit.jpg