money

Improve Credit Score: Clean Up Bad Credit

Credit

Bad credit can make life much more difficult than it should be. You may have trouble qualifying for loans and credit cards, and if you do get credit cards, they might have high interest rates. Also, your current creditors might raise your interest rates. You might even have trouble getting a job or signing up for utilities.

It’s no fun when your credit haunts you in everything you try to do. But it is possible to get your credit back on the right track. Here are some simple steps you can take to get your credit report back into shape.

  • Request a free copy of your credit report from all three reporting agencies (Equifax, Experian, and TransUnion). The Fair Credit Reporting Act (FCRA) requires each of these companies to provide you with a free copy of your credit report, at your request, once every 12 months. To order, visit annualcreditreport.com.  Currently, this is the only source for getting a free copy of your report as required by law.

Since you can get a free copy of your report from each agency once a year, take the opportunity to do so. Scour each report for errors. If there is something that you don’t recognize, or if a creditor has reported incorrect information, file a dispute with the credit bureau or bureaus that list that information. They are required by law to investigate, and if the information is found to be false, it must be removed.

  • Pay your debts down. When you have one or more credit cards that are maxed out, your credit score will suffer. Stop charging for a while and put as much money as possible toward lowering your balances. Soon your credit score will start rising.
  • Get caught up on your payments. If you’re currently behind, that will seriously impact your credit score. If you have a past delinquency but are now current in your payments, the delinquencies will have an effect, but they won’t be nearly as serious. If you’re having trouble making your payments, talk to creditors and see if they will accept reduced payments and bring your account current. Many will be willing to work with you.
  • Sometimes you can benefit from getting another credit card, as long as you do not use it. This gives you more available credit, lowering your balance-to-credit-limit ratios which improves your credit score. But if the temptation to charge would be too great, you’re better off just trying to pay off the debt you already have.
  • If you have a lot of past credit problems that are still haunting you, try getting a secured credit card from your bank or a credit agency. These cards require a deposit to secure your credit line, but they will help you rebuild your credit as long as you keep up with your payments.

There’s no way to instantly improve your credit. But by following these steps, you can improve your credit scores in a few months’ time. Good luck!

Stress Free is to be Debt Free

Debt Free

Most of us are no stranger to debt. We go into debt to buy homes and cars, and various things we think will make us happy when we get them. But paying for them isn’t so much fun.

When times are tough, it can be difficult to make payments on the things we need. And when we run up a lot of debt for unnecessary things, it can get out of control in a hurry. It’s enough to make us long for simpler times, when we didn’t have as much but weren’t buried underneath a mountain of debt.

But if you catch the problem early, you can turn things around. It will require a change in your spending habits and attitude toward debt, but in most cases you won’t have to make big sacrifices. And the payoff is a life with much less stress – something money just can’t buy. Here’s how to get the debt monkey off your back.

* Create a budget that tells you how much you have coming in each month and what you spend it on. Be honest – no one is keeping score. In order to make a change, you need to have a realistic picture of the current state of your finances and where your money is going.

* Look for things you can cut out of the budget completely. It doesn’t matter if they’re large or small, just go through and look for the things that you can easily live without. It could be that cappuccino that you get on the way to work every morning, or that monthly car detailing that you could do yourself, or anything else that wouldn’t make much of a difference in the grand scheme of things.

* Find ways to cut back on luxuries. If you go out to dinner with your spouse twice a month, cut back to once a month. If you have an expensive cable package, consider getting one with fewer channels. These measures will save you money without leaving you feeling totally deprived.

* Redo your budget with the above adjustments included, and see how much you will save. Then reallocate those funds toward paying off your debts.

* See how much you can shave off of your budget by utilizing coupons and other discounts. Clipping coupons and taking advantage of sales can save you a surprising amount of money at the grocery store and many of the other places you shop. Keep a record of how much you save, and put that amount toward paying off your debts, too.

If you take these simple measures, you’ll barely notice the difference in your day-to-day life. But after a few months, you will notice a marked decrease in your debts. And less debt equals less stress, which makes life so much more enjoyable.