Bad credit is depressing and often self-defeating. It can be compared with quicksand – the more you struggle to come out, the more you will sink in and hasten your demise. If you are planning to go for credit repair, here are five important secrets that will help you immensely.
1. You need to honor your financial commitments.
Get to work and draw up a Spartan budget that will allow some excess of cash from your income. Steel yourself to commit yourself to repay all your pending bills with whatever spare cash you set aside after your budget.
The best and fastest way to improve your score and credit is by applying yourself to the timely and regular payment of your bills. In case you need, you could re-negotiate the terms and conditions offered for the loan(s) in question and lower your monthly installments.
2. You need to consolidate your debts
You need to repay all the outstanding bills; the sooner the better. One of the best ways to do so (though initially this will decrease your credit score) is by consolidating your bad debts. In this way, you will be able to survive the financial crisis while you enhance your credit score and improve your credit report.
3. Do not close your credit card accounts, and do not open any more
Closing all but one credit card accounts will lower your overall credit-to-debt ratio, and that will impede a fast recovery from a poor credit score. On the other hand, opening more accounts will also have the same effect. The credit bureaus look at such sudden behavior as acts of panic, and they will result in a decrease in your credit score.
4. Re-negotiate all your debt terms and conditions
Most financial institutions will be quite open to the idea of adjusting their fines and penalty interest rates if you convince them that you are willing to repay the loan. All banks and financial institutions will rather lose some extraneous money (from fines and extra charges) rather than the whole capital.
5. Hire a reputable credit repair agency or agent
The process of credit repair is cumbersome and time-taking. You may know all there is to know about credit repair, but doing it is another thing.
Everybody is too busy with their own life styles to take time to follow up with the credit bureaus and collection companies, to find the best and fastest way to improve your credit score. If you have the time and knowledge, you should definitely try your hand at it. But if not, it's best that a credit repair agent or agency is entrusted with this task as they will be able to assist you in this task in the best manner possible.
As you can see, it's easy when you know how. These five strategies will help you get rid of a bad credit score and improve your credit report. Ensure that once you are out of the impasse, you enlist yourself with any leading financial counselor and learn the proper way to manage your finances in the future.