Top Ten Solutions for Bad Credit

2019/02/25

Bad credit against a person blacklists him for not ensuring the return of loan money within the stipulated time. A bad credit will make it difficult for you to get further loans from any financial institution. Such a credit condition usually happens when either your repayment checks have bounced more than once or when you have failed to pay your EMI’s on time.

It is true that human error can also be another reason for bad credit. An emergency financial crisis/illness in the family or work place may make you forget or stop your regular repayments for the time being.  While there are no laws that would take in to account the circumstances that pushed you to evade your loan repayment, there are steps that will help you to restore your credit score. Many people get haunted by the question of what are the top ten solutions for bad credit.

In this article we will be discussing some of the most popular ways of removing bad credit.

Pay Bills on time

If you are using your credit cards frequently then repay the bill amount as soon as possible. While it is advisable that you minimize the use of credit cards, there are some places like hotels and restaurants that require you to pay your bills only on credit cards. Moreover, in this age of advanced information technology many of you must be using credit cards to make on line payment of your utility bills. If this be the case then deposit the spent amount immediately to the nearest collection center.

Secondly, if you are facing cash crunch and are unable to immediately repay the money to your credit account then at least ensure that you pay the minimum amount due before the last date. Interests are charged every time you miss this date. This not only gives you a bad credit but also keeps on mounting on the actual credit amount.

Pay More Than The Minimum Amount Due

It is best for you to pay off the entire balance due at a time. If not possible then pay more than the minimum due amount. This puts a good impression on the creditors. Your credit amount not only lowers down but so does the interest charged on it.

Keep The Accounts up to Date

Sometimes, having less credit cards count for more financial freedom. If you have some older credit cards with amounts due on them, bring them up to date. This will certainly improve the credit score. Remember that more the debt on you, poorer will be the credit score. A bad credit will attract heavy persecutions and will also close all your doors for financial support at the time of need.

Keep a Check on The Credit Accounts

Always ask for your credit card monthly statements. A number of consumer cases filed against credit card companies are because of misinterpretation of due amounts on a particular credit card. This happens when extra interest rates and default amounts are charged even when the due amount is paid on time. To avoid such a situation keep a check on your credit card account so that you do not get liable for a bad credit due to the fault of the company. In case of a discrepancy, contact the credit card company immediately. If you have kept a transaction receipt of your repayment then it would be easy to settle such disputes.

In other cases you can always contact credit card counselors who will fight your case with the company.

Negotiate with collection agencies

If you are actually at fault for non-payment of dues on time then settle the credit card due with the collection agency. Negotiate with the amount of settlement. Try to evade the interest amount due and settle for a reduced principle amount. Once you reach a settlement pay the amount as soon as possible. Avail a report against the settlement from the company and make sure that the credit card bureau is made aware of the settlement of dues.

Make Consolidation of Credit Card Loans The Last Option

Credit card holders are often seen attracted towards debt consolidation or extension of the debt to several other accounts. Both of the above means of lowering the due amount attract a bad credit score. Consolidation should be taken as the last resort when you have opened many credit accounts at a time and are unable to keep up with their repayments.

Open Up a New credit Account

There is a very amusing fact about credit scores. If you do not possess a credit account you are liable to attract a bad credit!

The credit bureau judges the repayment capacity of an individual on the basis of their credit score. If you do not have a credit score, the lenders remain unaware of your financial capacity. This again can add a negative point to your credit report.  Open a credit account. If you are a fresh entrant in to the world of credit cards then apply for a secured credit card. For this you will have to pay some amount in to the account before using the card. The funds get returned back once you earn a good credit score.

Take Small Loans

Taking a loan against your credit card will make you more responsible for repayments. This ensures lenders that you have the capacity to repay back loans. This adds to your credit score.

Make Advance Payments

This means of improving a credit score works well. Make advance payments in your account even before you use it. This will have two benefits. Firstly, this will show off that you are financially strong enough to pay off your debts even before they are incurred. Secondly, the due amount is kept low.

Get in Account With a Debt Solution Network

Debt solution network are private organizations that render their services to settle debts in an amicable manner. If you are deep into debts and wish to straighten your credit score then contact a debt solution network immediately.

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