The Best Way to Improve Credit Rating

The Best Way to Improve Credit Rating

There is more than one best way to improve credit rating.  Sometimes it is a matter of using several methods together that will increase your credit rating so you can buy on credit and pay lower interest rates.  It is important for you to realize there is help available to you for credit repair.  It is not a matter of you being in this alone.  Often credit counseling agencies are the answer.  This is an option you should consider if you become overwhelmed by the task of getting a good credit rate again.  You will also want to have a good credit rating since your chances of getting a good loan relies upon it.

Often people cannot buy a house or automobile if they have bad credit or a poor credit rating.  Unfortunately millions of Americans actually have poor credit ratings.  This is not something you are going through on your own.  Remember that your interest rates will vary depending on your credit history and credit rating.  The higher your rating is the lower your interest rates will be.  It is for these reasons that you will want to work on your credit rating.

Credit Reports Are a Good Place to Start for a Best Way to Improve Credit Rating and Credit Repair

When you are ready to start working on your credit rating and your credit history, you will need a copy of your credit reports.   These are available through the three major credit bureaus in the US.  Once you have the report you can check them for errors.  You would be surprised how often mistakes are made by creditors.  They will mark on time payments as late on occasion.  This mainly happens from the payments going through different departments.  When it finally reaches its destination, they think it is late when it was paid on time.  You can dispute any errors by contacting the credit bureau and the creditor that made the mistake.  Explain the error and show proof the payment was made on time.  This can be done with check stubs and checking account statements.

You shouldn’t have to dispute the wrong phone number, address or even a misspelling of your name unless you fear identity theft.  Then it is imperative that you act quickly to get the problem solved.  Identity theft happens every day and you are not safe because of a poor credit rating.

Best Way to Improve Credit Rating – Don’t Make New Charges on Credit Cards

One thing that many people do is to continue to charge on their credit cards even though they have a poor credit rating.  You won’t be able to improve your credit rating as long as you are making new charges on your cards.  Whether you decide to tear up the card or just put it in a drawer where you won’t use it, is up to you.  As long as you don’t make new charges you can improve your credit rating.  The deeper in debt you become the more your credit rating will drop.  It is very important to stop this drop now.

Past Due Balances Need to Be Paid when Choosing the Best Way to Improve Credit Rating

If you are behind on a credit card you should consider getting it paid up.  Getting all over due balances paid off so you aren’t continuously getting bad reports on your credit report.  35% of your credit rating is decided by credit history.  That is a lot and can make the difference between good and poor ratings.  You definitely will want to get them paid before they are sent to collections.  Then your credit rating could drop significantly.  It is also important to pay anything that has been charged off.  You can get better ratings in the future if you pay these now.  These can stay on your credit report for years at times.

Best Way to Improve Credit Rating – Contact Creditors to Work out Payment Plans

This is something no one wants to do but it is necessary if you want them to work with you to get your credit rating to improve.  Most people do everything possible to avoid talking to creditors when they are behind in their bills.  They will even refuse to answer the phone if it is an unfamiliar number.  Instead of waiting for them to call you, consider calling them.  They will not be rude or pushy if you call them and tell them you are having financial difficulties.  Don’t be afraid to ask them for help.  Often your creditors have hardship programs and will work with you to get your bills lowered.  They will forgive late fees and allow you to pay less interest until you are able to pay higher payments.  When you use a hardship program they will check with you periodically to see it your circumstances have changed.  This could be the help you need to begin to repair your credit.

Best Way to Improve Credit Ratings – No New Applications for Credit

When you apply for a credit card or bank loan, they will check your credit report to see what your credit is like.  Every time someone checks your report it is marked on your report so your credit rating can actually drop when you apply for credit.  After you have improved your credit and credit ratings it will be safe to apply again.  You should still reconsider however, since credit cards are probably why your rating is low.

Debts should be Paid Off for a Best Way to Improve Credit Rating

Nearly 30% of your credit score is made up of your present debt.  That is why paying off some of your debt is necessary to get a better rating.  What you can do and should do is concentrate on getting your credit card with the highest interest paid off.  You can pay it in full if you have the money.  This is the approach that is recommended but you can also pay triple payments or whatever extra you can afford each month.  You can pay the minimum on other credit cards while you are paying the highest interest card off.  Your credit rating will increase once you have paid some of your debt down.  It will also be easier on you financially.  You can then begin to work on the next credit card you have.

Best Way to Improve Credit Rating – Ask For Help from Credit Counselors

If you are feeling overwhelmed by your debt and don’t’ see any way to improve your credit rating, contact a credit counseling agency.  They will help you to see the light of day once again.  They can help you with your creditors and tell you what you have to do.  They will help you get your payment reminders in order so you know when your payments are due.  Remember that every time you pay late, your credit rating will drop.  Credit counselors can be found on the internet, at the National Foundation for Credit Counseling or even on your bills.  Many credit card companies will carry the names of credit counseling agencies on the statements they send to you.

Remember to be patient with the whole program.  It took time for your credit rating to drop and it will take time for it to go back up again.  Be persistent and continue to work with creditors and on your debts.  The best way to improve credit rating is by using the advice you have been given here.  You can get good credit again but you will have to work at credit repair.  Just be patient and you will begin to see a change in your ratings.