Bad credit happens to good people. We all know it yet no one wants to talk about it.
We've all had a trip down memory lane about a bad credit experience or two. However; never fear, Your credit educator is here!
Here are a five credit tips to help you get back in good standing with your creditors and lenders. Follow these simple yet effective tips and you'll be in good standing in no time.
1. Pay your bills on time.
Creditors care about two things; getting their money and getting it on time. Making timely payments is the definition of being a good steward. When we dishonor our due date, that sends a message to creditors and lenders that you don't care. As due dates come and go, making timely payments means that your cashflow is in order. The first and one of the most important steps to being in good standing is to make timely and sufficient payments. Do not dismiss your on time payments.
2. Pay off debt instead of transferring them.
We've all ben there; a race against time to figure out a plausible debt solution.
Some people may suggest bankruptcy and others might say debt consolidation is the best solution. What is the best solution for you, your friends and family's plan is not yours.
To each is own. Realistically, paying down your debt instead of transferring or consolidation is your best bet. Lenders and creditors will work with you so long as they know you are making an effort. Pool your resources, take on an extra job or start a business, then start a savings account for your debts, do whatever it legally takes to gain your financial freedom. It's better to pay late even, than never.
3. Check your credit often.
This will help you identify if anything is wrong or if your identity has been stolen and being used by unscrupulous people. There's an old rumor that checking your credit score often will lower your score and that could not be further from the truth. There are free tools and resources like Credit Karma or Experian that are available for instant credit check. It's better to know your score than to live in fear of what it might be.
4. Contact creditors if you're falling behind on debts.
Remember your payment history makes up approximately 35% of your credit score, therefore a good record of on-time payments will reflect positive on your end. Reaching out to creditors about possible discrepancies shows them that you are interested in making payments but are possibly facing financial difficulties. Being a good steward of credit can be as simple as picking up the phone on your free time and giving the bank a call. Remember, it's never too late to start your journey back to good credit with your lenders and creditors.
5. Never close your account
You probably have paid off a credit card and wondering if you should close it out.
Don’t; that card is helping with your credit history which is 15% of your overall credit profile.
Credit history is a record of your ability to repay debts and your demonstrated responsibility in repaying your debts.
Your credit history shows the credit used. How long you have the credit accounts, how you pay your debts and more.
It reflects if your bills are paid on time and a mix of different credit accounts.
If you want to maintain that credit card just make a small purchase and repay it before bill is due to keep the card active as credit card company’s will close your card out if they realize it is not being used after a period of time. .
Contact us for more information on credit restoration and more financial planning information. www.maximumsolutionsfinancialservices.com
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