Your credit score is a very important part of your financial health. When you default on loans or miss monthly payments you are endangering your borrowing power. Any time you apply for credit of any kind, the lender first checks your report to get an idea of how responsible you are in repaying your debts. A low score could result in denial of the application or a high rate of interest in the repayment plan. Therefore it is important to take steps to repair credit score reports as soon as possible.
There are three main credit reporting agencies that receive information from lenders and merchants. Every time you miss a payment or are late, this is recorded in your credit report and lowers your score. You can obtain a free report once a year from each of these agencies and this is something you should do on an annual basis. Check the document carefully, especially your address, full name, the name of your employer and your current debts. Identity theft often does not show up until people find they have credit problems and are astounded to realize that someone has borrowed money using their name and of course didn’t repay. You do have to contact the agency involved in writing to start the process of having the errors corrected.
When your low score is the result of negligence on your part, you do need to sit down and make a list of all your debts. If you do have the finances available to make the payments, remit the amount of money owing to the creditors as soon as you can. However, if you are in a position of financial hardship, due to layoff because of the downturn in the economy, divorce or illness, you can apply for a debt consolidation loan to combine all your bills into one. This makes it easier to live up to your monthly commitment and lenders do look favorably on this action because they see that you are starting to take control of your responsibilities.
When you find that you are having financial problems, you should not try to avoid the lenders. Make an appointment to sit down with them to discuss your situation and explain why you are unable to live up to your commitments at the present time. You will be surprised to find that they are willing to help and will work with you to rectify the problem.
Debt consolidation agencies can also help you by making arrangements with the creditors to take lower payments in order to get you back on track. In this type of plan, you pay a set amount of money each money and the consultant working with you distributes the money accordingly.
Your borrowing power is severely hampered when you have a poor credit rating. Take a detailed look at how much money you owe and your income to find ways of paying higher amounts on one bill at a time. By concentrating your efforts on one account and making the minimum payments on the other, you will gradually start to eliminate your debts. However, do not regard the money you have when you repay an account as extra. Instead, use this to pay down another bill and this will happen rather quickly when you make higher payments.
When you do start to repair credit score, it is important to realize that this will not happen overnight. It will take at least six months before you will notice any raise in the percentages.
Want to find out more about how to repair your credit score, then visit Quick Fix Credit Score where you can receive your free report on 10 Free Steps To Instantly Start Repairing Bad Credit!
