Like many Americans we have all faced some issues that have affected our credit scores. And just like many Americans, we have all wondered how to repair our credit scores. So, I did a little research on this topic and if you indulge me for a few minutes, I would like to share what I found with all of you.
How do I repair your credit score?
The first thing I found was a concept, really. I needed to understand and except the fact that there is no quick fix to repair your credit score. It is going to take some time, not forever but it certainly won’t be fixed say tomorrow. So, I found that there are a variety of ways to repair your credit score. For example, the most obvious method is pay your bills on time, which leads to another strategy, if you’re behind on payments, get current. Then you need to correct any errors on your credit report. And finally, reduce your debt. Now keep in mind this is certainly not an exhaustive list but some of the main ways to repair your credit score.
What are some of the best ways to pay my bills on-time?
The best way, I would think, that most people would suggest as to how to pay your bills on time would be just to pay you bills on-time! Logical, yet not very helpful. In today’s fast paced on the go technological world, it is very easy to forget to do this, honestly. And quite frankly, there are many people who just have not reached that level of responsibility to get this done month in and month out. But the same thing that can hinder us, can help us; technology.
Use technology to help you pay your bills on time. Set up reminder alerts in your calendar, like Google, or email, like Outlook. Use your bank or credit union’s automatic bill pay. Set up automatic payments through the various companies you make recurring payments to, like utilities, internet access, rent.
Just make sure if you do the automatic bill pay, you review your bank statement, online if you wish, to confirm that your bills were paid correctly and on time.
What strategies should I use to get my overdue bills, current?
Being behind on bills can be very daunting and stress inducing. Just remember though, it is not the end of the world, if you take steps to get back on track. So, what do you do to get overdue bills back to a current status? First, take inventory. Collect all your overdue bills and then prioritize them as to in which order you are going to work on getting them current. You should prioritize them in order of importance of the running of your daily life and magnitude of how behind you are, will a service you need say for example water get shut off if you don’t pay today.
Once you have that do the next thing to do is to figure out where the money to pay for these might or have to come from. At this point it is extremely helpful to have a household budget on hand. If you do not have one, this is a great time to make one! You need to be able to see how much money you have coming in and from where each month and how much money you have going out and to where each month. With a budget you can see exactly where you need and are able to tighten the fiscal belt strap and move money around to start getting your overdue accounts back to current and on time.
Now that you have your budget and your overdue bills prioritize, now is the time to reach out to those creditors and discuss a repayment plan to get you back on track. Most companies would rather have you working towards paying off your balance than dealing with the hassle of fighting with you to pay your bills. They will work with you, believe me.
At this point you may have to bite the bullet and accept the fact that you need more money coming in. What does that mean? It means, and don’t hate me for saying this, that you just might have to work more hours, ask for overtime or get a second or third job. Yes, I know that is easier said. And yes, I know that sucks to hear. But it just may be your reality, at least until you are caught up. Unfortunately, part of being an adult is to be responsible and do things that we may not want to do, like working extra jobs.
Finally, although this will not help with your current batch of overdue bills, it will help if you find yourself in a similar position in the future. Start an emergency fund account. Put money away in an account that you can access when funds are thin to keep your payments current. It will require discipline for you not to dip into this account to but a couple of large pizzas for the big game. Remember these funds are for things like paying your rent if you find your funds lacking during the month.
How do I fix errors on my credit history?
Mistakes happen, that is part of life. We all make them. However, mistakes that lower your credit score is a modern-day scourge of humanity. Okay, maybe it is not that serious, but it is still a big deal. It is a fact that credit scores are far easier to lower than raise, so you don’t need mistakes making you fight to repair your credit any harder than it already is. So how do you fix errors in your credit history?
The first thing you need to do is, well, review your credit history. You are allowed one free credit report from each of the three main credit bureaus each year. Get them! You can have them mailed to you but, hey, it’s the technological age; you can view them online at the credit bureaus’ site. Now that you have reviewed your credit report, what do you do? If you find something that is inaccurate, dispute it! Again, you can mail a form to the credit bureau or fill out their online dispute form. This will start the process of you voicing your concern and them contacting the credit agency that reported the ‘error’.
As the credit agency responds, you may be asked to upload or provide additional information to support your claim. Once all the facts are obtained by the credit bureau, they render a decision. If they find in your favor, the errant information must be removed. However, if the find the information is correct, then it stays on your report. Keep in mind, that even if you successfully dispute an errant posting on your credit, having it removed may not improve your score. But you have the peace or mind knowing that you are not getting dinged for something that does not belong to you.
What are some of the best tips to reducing my debt?
Again, this seems like a no-brainer, but it may sound easier than putting into practice. So, what are some tips to reducing your debt? First and foremost, STOP creating new debt! Get your spending under control, here again, is where a monthly budget comes in handy. If you can, increase your monthly payments on your big-ticket debts, car notes, mortgages, student loans for example.
Start building that emergency fund we discussed earlier. The general rule of thumb for that is you want to have at least six months of rent or mortgage payments saved up. I personally try to have around five thousand dollars sitting in that account, a savings account, you know so I can get a little interest as well.
Even, or especially, if you are current and have been current with your bills, reach out to those creditors and ask for a lower interest rate. It costs nothing to ask. I hate to sound like a broken record but being responsible and disciplined when it comes to your finances are the absolute best way to reducing debt, managing debt, and making your money go a long way to your enjoyment of life.
What is I need help reducing my debt and improving my credit score?
We all need a little help sometimes but we need to be intelligent and humble enough to recognize this. It also takes courage to ask for help. So if you are in a situation where your debt is out of control and you need help, then you might want to look into working with a debt relief company.
The team over at Debt Reset US may just want you need. They will discuss with you the best options for getting out from under your debt, And don’t forget to ask them about their credit score repair service.