Credit Repair: Advice from the Experts
Credit repair is the act of fixing damage done to a credit report. Its purpose is to eradicate negative items, improve credit scores, and ensure the consumer is better placed to secure low-interest loans, credit cards, and more.
We spoke with the credit referral company Finance Council to get some tips on how to fix your credit repair and to understand just why it’s such an important step to take.
If you need a little more advice, contact Finance Council today. You can benefit from a 100% free, no-hassle consultation, with no obligation to buy and no pressure selling. They will connect you with one of their trusted credit partners and could help to dig you out of a financial black hole.
1. Check Your Credit Report
You can’t fix something if you don’t know how or why it’s broken. Millions of Americans are struggling with low credit scores and rather than trying to fix them, they bury their heads in the sand and wait for everything to go away.
As daunting as it can be, it’s essential that you check your credit report at least once every few months. It’s not uncommon for incorrect or obsolete information to appear on your report and this could have a seriously detrimental effect on your credit score.
One of the first things that Finance Council’s trusted partners do is check your report, look for things that shouldn’t be there, and remove them. You can do this yourself, as well, although it may take a little longer to run through the necessary steps.
2. Use Debt Payoff Strategies
Methods like debt snowball and debt avalanche can help you to clear your debts without resorting to risky management/relief strategies.
The idea is to either focus on the biggest or the smallest debt first and then go from there. By prioritizing the biggest debts, you’re getting rid of the accounts with the most harmful interest rates, thus ensuring you spend less money over the long-term.
Prioritizing smaller debts doesn’t provide many financial benefits, but it does give you a mental boost when you see those debts disappear and this could motivate you to continue.
Every additional payment that you make eats into your total interest; every debt you clear reduces your score. It’s a long and slow process, but you’ll make gradual improvements on the way.
3. Be Wary of Credit Cards
US credit card debts are overshadowed by medical and student loan debts, but while they’re not the biggest, they are some of the most harmful.
The average credit card APR is a staggering 16%, and these cards also charge extortionate fees.
More importantly, they can seriously affect your credit score.
Any time you apply for a new card or open a new account, your score will take a hit. It will also suffer if you max it out. Your credit utilization is affected, as well.
Credit utilization is a measure of your total credit vs your total debt and it counts for 30% of your credit score.
If you have two credit cards with $10,000 limits and $5,000 debts ($10,000 total debt; $20,000 total credit), your credit utilization score is 50%.
If you clear one of those credit cards, it will drop to 25% ($5,000 total debt; $20,000 total credit). But if you follow this by canceling that card, your score will return to 50% ($5,000 total debt; $10,000 credit).
By the same token, any time you reduce your credit card debt or increase your credit limit, your utilization score will improve.
4. Pay on Time
Your payment history counts for 35% of your total credit score. It’s one of the few aspects that you can’t improve in a few days or weeks, and you will need to keep making payments over many months if you want to see those changes.
However, it only takes one missed payment for all your work to come to nothing. To prevent any
issues, set up auto-pay and make sure you make every single payment on time and in full.
Get Credit Repair Support Today
If all of the above sounds a little daunting, you’re not sure where to begin, or you need more
personalized advice, contact Finance Council today. When you dial (800) 824-0315, you’ll be given a free 10-minute consultation and can take things from there.
You can never underestimate the benefits of speaking with a truly knowledgeable and experienced expert.
Questions? Call 1 (888) 479-1250