Every day people in this country struggle with their financial situations. When the economy suffers, more people find themselves in serious financial trouble. If you are looking for ways to repair a credit score that may have once been very respectable, there are five drastic steps you can take to clean up your credit history.
Most importantly, chart your income and expenses, and take a hard look at the numbers. Construct a budget, and stick to it. Look for ways to cut expenses or increase the amount of money you are bringing in. Decide where you want to get financially, and adjust your priorities.
Once you have a firm grasp on your financial situation, it is time to start looking at your credit report.
By law, you are allowed one free copy of your credit report every year. Assess your history. If your score has nosedived and you are not sure why verify you have not been the victim of identity theft. No matter what steps you have taken, data breaches of companies can happen, exposing your information. According to Capital Processing Network, the state of South Carolina recently was breached to the tune of 16,000 unencrypted credit card numbers, 387,000 encrypted numbers, and 3.6 million social security numbers.
Make sure you contact your creditors right away if you are afraid you may be in danger of falling behind on payments. If you have missed some payments, do not ignore the phone calls, reach out to creditors and explain your situation. They may be able to set up a more affordable payment plan. No matter how far behind you may be, acting in good faith may give you some time to get back on your feet before they start taking action to collect on your account.
It may seem to go against what you are trying to accomplish, but acquiring a new credit card can help give your credit score a quick boost. If you are having trouble getting an unsecured card, research what options you may have with secured lines of credit. Most important when obtaining a new card is making sure that the card reports to all three credit bureaus. Capital Processing Network details a relatively new entry into the market by American Express which does automatic e-bill payment, smartphone check capture and direct deposit.
Above all else, beware of companies promising an overnight fix or those that promise you they can remove any and all negative information from your credit history. There are no secrets to repairing your credit score. Any incorrect information on a credit report can be fixed yourself with a little effort. If you do decide to employ a third party to help you negotiate with creditors, make sure you know your rights, and read any contracts thoroughly before you sign.
Credit score recovery can be a long hard road, but the sooner you start the quicker you will see results. Adherence to your goals and your budget will pay off in the long run, and get you further down the road to financial independence and less worry.