If you have the day off today it’s the perfect time to spend it improving your personal finances, and it all starts with your credit.
Analyzing our financial situations can be a daunting task, especially if a bad credit score haunts you. But, despite how easy it is to fall victim to credit, it doesn’t have to be the enemy we often make it out to be. If the words “charge it” made a regular appearance in your everyday vocabulary without a plan of action, you may be in need of some personal credit repair. Although the damage may seem irreversible, there are easy ways to fix your credit. Below, I’ve listed just a few:
Easy Ways to Fix Your Credit
Don’t Transfer Your Credit
It may be tempting to simply transfer your credit from one card to another, but avoid this as much as possible. All you are doing is causing yourself more heartache and (and debt) instead of taking action on your existing due payments. Along with putting off the inevitable, you may be subject to transfer fees and are therefore increasing your costs.
Keep Cards Without Annual Fees Open
As counterintuitive as it sounds, don’t close all your accounts at once. Instead, keep the ones that do not charge you annual fees to use for small purchases. The key is to make sure you then pay off those balances right away to avoid late fees, increased interest, and so on. This action alone is one small step you can take in improving your credit. Plus, canceling your cards without taking the proper steps (or that still have a balance) can end up hurting you more. CreditCards.com provides these helpful tips on how to cancel a credit card.
Seek Help Online
The internet is full of resources just waiting to help you with all your financial woes. In addition to this blog, you can find companies online dedicated to helping you repair your credit, such as Credit Sesame, which is a free web-based tool that provides you with not only a free credit score but advice on how to improve it as well. Not to mention, there are plenty of online financial forums you can participate in as well, like this one.
Review the Statute of Limitations on Your Debt
Your debt does have a statute of limitations, which essentially means the length of time that passes where a creditor can sue you for the outstanding payment. This length of time varies from state to state. If the statute of limitations on your debt has run out, you’ll be able to negotiate a lower overall sum. In some cases, the collector may end up ceasing efforts to collect the money owed.
Look Into a Secured Credit Card
CreditKarma.com advises individuals looking to rebuild (or building credit history in general) to consider a secured credit card. Secured credit cards, they explain, typically require that you pay a security deposit to work as collateral in the event you may have a past due payment on your account. Because you are taking on the financial risk with this deposit, they are not only easier to obtain approval by lenders but also help you improve your credit.
Avoid Filing for Bankruptcy
Filing for bankruptcy should be an absolute last resort. Try to avoid taking this step as much as you can as this stays on your credit record for roughly seven to ten years. It may wipe out your credit card debt, but it will not improve your credit report. In some cases, it may actually make it worse and will make it harder to obtain a loan or credit cards in the future.
Pay Your Credit Card Bills Early
Make an effort to pay your credit card bills before the statement due date. By paying your bill before your next statement is even ready, you can help to increase your credit score. This is really one of the easiest ways to fix your overall credit.
The important thing to remember is that you are not alone in this process. It does also seem to be easier to improve your credit as you get older, given that time helps to build a credit history, as shown in this December 8, 2016, article on CreditCards.com by Jamie Gonzalez-Garcia. The process is not easy (or fun), but with due diligence and discipline, you can conquer your credit and look forward to reaping the benefits of your hard work.
The above methods are just a few of the easy ways to fix your credit. What would you add to the list?