Having poor credit can severely limit lifestyle choices and the ability to handle financial emergencies. Modern loans, credit card applications, rental applications and even jobs often rest on having good credit. While unpaid bills can come back to haunt consumers years later, the good news is that bad credit isn’t too hard to take care of if you know what to do. Here’s how you can fix your credit to get back in the game.
See Where You Stand
Before making a credit repair plan, find out where you’re starting from. Request a credit report from one of the major credit reporting agencies. Don’t bother with the companies that charge for this service; you’re entitled to one free report each year directly from Experian, Equifax and Trans Union.
To identify inaccuracies on your report, look for differences between the reports. In some cases, locating errors is all that needs to be done to fix bad credit. If you confirm, however, that there are opportunities for improvement, you’re ready to start repairing your credit.
Identify All Outstanding Debts
Make a list of all the debts you need to take care of. Record the amounts you owe, ages of existing debts, account information and important contacts. Loans that are racking up the most interest should be your priorities to avoid owing too much more later, but be sure to continue paying consistently on all your other bills in the meantime.
If you have enough cash on hand and would like to clear things up right away, contact creditors directly and tell them you want to pay off your debts. While these debts may take some time to disappear from your credit report, future credit checks will show that these debts have already been paid off. Now you’re ready to start rebuilding your credit.
Set Up a Household Budget
To develop your new reputation as a worthy credit recipient, you should create a plan to ensure that your future bills are always paid off on time. Don’t stretch yourself thin by taking on more bills than you can pay. After taking care of outstanding debts and maintaining consistent bill payments, you’re ready to really develop your score with a new credit card.
Get Any Credit Card You Can
If you can’t get a store credit card or unsecured card, get a secured card from your bank. To do this, you’ll need to make a small deposit to give the creditors peace of mind about lending to you. Don’t go overboard with your new credit card; keep purchases small and pay them off every month. Most people like to reserve this card for routine purchases such as groceries and gas, but the most important thing is to stay diligent about repayment.
Once you’ve stayed in good standing with your secured card for about a year, approach your lender about getting an unsecured card. From here, your credit score will really take off. Just keep paying those bills on time and you’ll soon enjoy all the perks that come with having good credit.
This guest post was provided by Prudent Financial Services, helping Canadian regain their financial stability by offering affordable bad credit personal loans. For more information please visit, http://www.prudentfinancial.net