A bad credit score can really take its toll on human life. It can pressure people and may drive them into depression. Nevertheless, despite the fact that it may create great stress and may cause headaches, it can be fixed and improved. There are several ways to fix bad credit scores. One only needs to be determined and motivated to get out of bad credit. The methods, though, may not guarantee a quick solution to the problem but it may otherwise lead to a better credit score situation. Here are some pointers on improving credit scores:
Stop Making Unnecessary Purchases with Credit Cards
Unless poor credit situation has been addressed and solved, it is best to stop using credit cards in all types of purchases. Using the credit cards while having problems with bad credit scores can only make matters worse. Pay off outstanding balances in the credit cards first before making any purchase. Adding another debt on the credit card can greatly hurt credit scores and may only lead to greater problems.
Stick to the Credit Limit
Always keep in mind the credit limit and try not to go beyond it. If possible, try to refrain from indulging in any more spending spree and use credits only when utterly necessary. Start paying bills on time and make sure that all outstanding balances are paid before using credits again.
Examine Credit Reports
Get copies of credit reports from the credit report bureaus and examine them carefully for errors and/or omissions. There may be instances that errors are incurred in the reports, thereby adding to the figures that lead to lower credit scores. Copies of credit reports can be obtained for free from respective agencies or from the credit bureaus. In an instance that errors are seen on the reports, a dispute letter must be sent to the credit report bureau. The dispute letter must state the problem found in the report in complete details. The bureau may make proper investigations based on the complaints found on the dispute letter and necessary corrections may be made after 30 days of acceptance of the letter.
Make Proper Documentations of Credits and Other Matters Related to Credit Scores
Be kept up to date with all credits incurred. Document all expenses and always be aware of the recent credit score. Keep copies of all transactions including dispute letters and complaints. This may help in finding solutions to a bad credit score situation. In the case of dispute letters, keeping a copy of the letters sent may help when there is a necessity to make a follow up on the matter.
Try to Reestablish a Good Credit Reputation
Start paying off bills and outstanding balances on time. Also, refrain from closing out credit accounts if possible. Instead, wait for a perfect time and resurrect these credit accounts. A great number of closed accounts and new credit account enquiries may greatly hurt the credit score. It can lead credit grantors to believe that financial crisis is on the rise. Thus, bad credit scores ca be highly expected. If possible, add stability on credit files. These can be done by asking credit grantors to submit monthly reports regarding on-time payments to credit report bureaus.
Guide to Bad Credit History Credit Cards
Bad credit history credit cards were introduced because so many people no longer qualify for mainstream financial products. Failing to comply with the terms and conditions of an agreement will result in a low credit score. This makes it far more difficult to get approval for loans, mortgage and charges cards in the future because that individual now represents a far higher risk to the lender. Credit cards for people with poor credit typically charge higher interest and have more fees to underwrite the likelihood of the borrower defaulting again.
Why Do Customers want a Bad Credit History Credit Card
Whilst some customers simply want a way to pay their bills and manage their finances better, others are seeking a way to rebuild credit for the future. It can be almost impossible to book a hotel room or get the car repaired without a charge card. Poor credit credit cards are physically identical to their mainstream equivalent so very few people will ever know that adverse credit is an issue.
Types of Poor Credit Credit Cards
Pre-paid credit cards. The customer loads the card with their personal funds. Although there is no credit limit, an application is guaranteed to be accepted. Helpful for managing finances.
Unsecured credit cards for bad credit. Although the credit limit is low, lenders will report to credit reference agencies. Limits can be increased once reliability has been proven.
Secured credit cards. Providers lend money on the basis of collateral. Security could be a house, car or even a cash deposit. Higher credit limits are available and lenders will report to credit reference agencies.
Credit Repair with Unsecured Credit Cards for Bad Credit
Once someone has benefited from a debt solution, it is quite possible that no active credit agreements exist. A poor credit credit card can be used to recover from a low credit score. Although most lenders only give customers a minimal credit limit (perhaps $250), they will report to Experian, Equifax and TransUnion each month. A series of timely repayments will help to gradually rebuild credit and increase the likelihood of approval for mainstream financial products in the future.
How to Get Guaranteed Credit Card Approval
Only a secured or pre-paid credit card application is certain to receive approval because there is zero risk to their balance sheet. There are also unsecured credit cards for bad credit available, but the charges tend to be quite high. Provided that the borrower appreciates that the cost of borrowing will now be higher, the likelihood of acceptance for a bad credit history credit card with a low credit limit is excellent. Once a customer has made a series of repayments on-time (normally after six months), a request to increase the credit limit can normally be made.
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