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We all know that bad credit is a limiting and anxiety producing aspect for those dealing with low scores. Instead of trying a quick fix method that always fails, understand that the most effective cure for your credit will take both time and patience. If you have been careless and irresponsible with your spending in the past, it follows that you will need to change those old habits to really see improvement in your over all credit score.

Where Should I Start?

As with any process, it may be hard to get the proper perspective of exactly how to proceed. Top priority is to request a free copy of your credit report. With this in hand, you can identify where the issues are and adjust accordingly.

Are you shocked that your score is lower than expected? There is a possibility that errors have occurred along the way. Be very scrutinizing of any incorrectly listed late payments, and verify that the amount of money you owe is correct. If there are any discrepancies on your report, contact the reporting agency as well as the credit bureau to sort out the issue.

Lesson Learned

Life is and will be hectic. Remembering to make on timely credit payments can seem unrealistic. If so, there are probable solutions. Contact your bank to determine if there is a way to set up payment notifications. Lots of banks offer online banking which allows you to customize settings, ie. reminders, and without much effort.

Automated payments are a simple way to make amends for the consequences of forgetfulness. This assures that you won’t miss a payment – so contact your loan and credit card providers to set up automatic payments. Be leary of relying too heavily on this tool, because eventually you will want to make payments that are more than the minimum amount required.

Downsize Your Debt

To insure your effectiveness, you will want to eliminate any continued use of your credit cards. Assess your interest rates and know how much you owe for each account you have open, exact a plan for payment that works with your budget. It will be difficult, but you will want to allocate most of your funds to paying off your debt, focusing first on the high interest rate credit cards. Do not miss payments on any of your accounts. This may mean making the minimum payment on other cards with lower interest rates.

Maintenance and Repair

Make absolutely sure you are making payments on time. The impact delinquent payments is substantial and very damaging. Even with a history of late payments, the benefit of getting on track can not be understated. A track record of timely payments will show in your credit score, and your history will lose its relevance as time passes.

If you have a history of dealing with collection agencies, you should pay off any bills you have with them. Once you have taken care of your bill, understand that this will stay on your report for seven years. While unfortunate, it will eventually disappear from your record.

Seek help from a credit counselor. While managing your credit and making timely payments will not instantly be reflected in your credit score, you will see increases over time. Talking to a counselor aids you with advice on the best choices to make if you are having a hard time getting by financially. Receiving advice will not negatively impact your score.

How to Approach Your Outstanding Credit Card Balances

The amount of debt you have will always affect your credit score. Do everything you can to keep your credit card balances low. While it can be appealing to rearrange your debt, you will benefit more from paying it off. If you have fewer accounts open, this may have a positive influence on your credit score. Shy away from getting rid of unused credit cards; this will not be an effective way to raise your credit score in the long run. On the other hand, do not try to increase the credit available by opening more cards. This could be detrimental to your score.

New Credit

Avoid opening many accounts too quickly. Not only does this look like risky behavior for new credit users, but it lowers your average account age. This is especially important to remember if your other credit information is limited.

Keep in mind that it will be beneficial to create parameters when looking around for loan rates. When searching for a loan, keep your inquiries limited to a specific time frame. This shows that your efforts were focused, rather than being an ongoing search for new credit lines.

Don’t hesitate to get a copy of your credit report, but do make sure you are getting it directly through an organization that has the authorization to give consumers credit reports, or through the credit reporting agency.

Make sure you are only opening credit accounts that are necessary. Having too many accounts is not likely to increase your credit score. It is important to have credit cards, because not having any can make you more susceptible to risk than someone who has demonstrated responsible use of their credit cards. Remember, even a closed account will appear on your credit report and could possibly be reflected in your credit score.

Change Habits and Look Ahead

It won’t be easy to apply all of the above steps, but it is imperative that you want to truly fix your credit score. There are no quick fixes. Instead, assert your own ability to become more responsible with your finances. With some patience and hard work, you can be on your way to a better credit score.

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