4 Ways to Get Out of the Bad Credit Slump

As all too many people have been finding out, it’s really easy to overspend your income and end up with a bad credit score.  Even if you miss a few monthly payments, in the eyes of your creditors you name can quickly turn to mud.

However, having bad credit does is not necessarily the end of the world.  Luckily, there are a number of steps you can take in order to fix bad credit.  Take the time to consider and use the information that you’ll find in this article and you will see your credit score rise.

Keep Track of Your Credit

The best way to keep a good credit rating high and to improve a poor credit rating is being vigilant about where you stand credit-wise.  Whether your credit is good or bad you should keep track of it by making sure that you pull reports from all three of the major credit reporting agencies.

These agencies have been known to make mistakes.  Even if there’s a mistake on just one of their reports your ability to get a mortgage or finance a car could be adversely affected.  If you know there is a mistake you can take the steps to rectify it.

Are the Collection Agencies Calling?

If you’ve just run into some payment problems and the collection agencies are beginning to call you, you should not dodge their calls.  That’s because you have 30 days from when you receive a collection notice to make a payment.  After that it will show up on your credit report.

If you speak to them within those 30 days they will usually want to work with you and may permit you to break the payment up into a couple of monthly payments.  Doing this would be a win-win scenario because they will get their money and the problem won’t show up on your credit report.

Protect Yourself from Credit Repair Scams

If your credit is poor you may be tempted to follow up on an ad or a commercial that runs along the lines of, “Completely legal new credit identity.  Call now!” or “Credit problems?  No problem!”  Beware, though, because legitimate credit repair companies would never make any claims like these.

Credit repair companies that advertise in this manner are probably trying to scam you out of your money.  They are not going to try to help you with your credit score.  Before falling for any of these scams you should thoroughly research how you can help raise your credit score yourself.  Do this and you can save a lot of money while improving your credit rating.

Limit Your Applications for New Credit

Did you know that every time you apply for new credit that the company you apply to will generate a “hard” inquiry on your credit report?  These inquiries will work against you in two ways.  First, they will slightly lower your credit score.  Second, lenders could then perceive you as a credit risk because in their eyes you seem to be trying to open multiple accounts in a short amount of time.

So instead of submitting a lot of applications, you should first make informal inquiries to the credit card companies about the rates they charge.  Then, after you’ve put together a short list, submit a formal application to the one with that offers the best terms.

Nobody ever said that it would be easy to pull yourself out of debt.  Depending on the amount of debt you’ve accrued your journey might be long and a bit arduous, so be prepared for it.  However, what is significant is that once you begin to repair your credit you will see that it will start to improve over time.