What Do Credit Problems Mean To You?
Having a truck load of credit problems can cost you fortune in inflated interest rates and can even be embarrassing. In todays world our credit scores are as important as having a retirement plan or solid portfolio. Here are a few handy steps to take that can help your credit score so you can purchase the much needed things in life.
Credit Problems 4 Step Precess
Its often difficult to quit a habit overnight and the general handling of ones finances is no different. It’s the American way to buy stuff and heaven knows there is plenty to lust over. Nothing like the smell of a new car or the feel of new shoes, but the only way to get away from the financial rat race is to dig in tighter then a tic and pay things off! Lets look at this process as turning credit problems into credit solutions. Here is a few things to think about to get moving in the right direction of financial freedom:
1. Evaluate your credit- What is your credit score? What negative items on your credit report are giving you credit problems? Most folks do not know what’s looming on their credit report till its too late. Don’t get stuck behind the eight ball when you apply for a loan. Looking at your credit report is like getting a physical from your doctor, it is important and the federal government allows you one free credit report each year with absolutely no impact on your score, that is if you check it yourself. If a car dealership or mortgage company check the report it’s a different story, however, and can drop your credit score by 10%. Organizations like Lexington Law firm can access your report in your behalf and give you a good understanding of how it all ads up for free, right there on the phone (800-594-5266), for more information visit my Lexington Law Page. This is a no-brainer first step if you have not checked your reports for a while. Statistically 78% of all credit reports have something that does not belong there, so take ten minutes and have a look! Lexington offers a very nice review by a qualified paralegal who will explain what each negative item is on your credit report point-by-point. They have instant access to your credit report and credit score and with the verbal consultation they will also issue you a link to your report with no obligation. In other words its like a free physical.
2. Slow The Flow-Racking up new debt on credit cards shows the lending world that you are a not responsible and this can cause huge credit problems. If you have credit cards with over the top balances work on paying them off. Pay of the card or cards with the highest rates firs and work down. Even showing good intent, by paying them down regularly, can raise your credit score fast.
3. Take Action-Once you have a good idea of whats looming on your credit score, take action and establish a solid game plan. You can do this yourself or get assistance from a reputable credit repair agency. Remember, you likely did not get into a credit pinch overnight so repairing your credit will not happen overnight either. Refrain from organizations that claim to give a quick fix, they are looking to drain your wallet and nothing more. Most importantly, you must get the ball rolling right away, procrastination will only deepen the hole you are in so take action.
4. Shop Around- Having great credit is well worth the short term sacrifice. In todays world it is fashionable to be frugal and get back on top. Once you have that prime credit score, shop around for the best interest rates possible, lenders are very competitive in todays word and it pays to search them out if your credit score is above a 720. This holds true with credit cards as well. Once your credit problems are conquered, shop for a good credit card to use responsibly. After a few months of responsible usage, on a low yielding card, your credit will bounce back quickly. Be careful, however, once you show the world you are responsible the flood gates will open and every credit card origination out there will send you offers in the mail. Opening multiple accounts can only lead to a whole new set of credit problems.
Credit Problems No-Brainer
A big question for folks with credit problems is how to find the extra cash to pay on existing debt? A few things to look at is how we spend our monthly income. More often then not we get stuck paying inflated costs for things like cell phones and television. As a general rule both of these services can be reduced significantly without losing service quality. Try calling your cell phone provider and tell them you are in a financial bind and you are working on eliminating your credit problems. This indicates to them that they could lose you as a customer. It is very likely you don’t need as many minutes or services that you are paying for. In many situations you can shave $40-450 off of monthly cellphone costs alone. These same tricks work with cable or dish providers as well. I used these very tactics and shaved $115.00 a month off of my monthly expenditure. In turn, I applied that extra cash towards a 22% interest credit card and paid it off in no time. My credit problems went down considerably and raised my credit score by 89 points. Rather then buying more junk I applied that $115.00 plus the original $100.00 a month to the next card and squashed it even faster. Yes, this takes discipline, however, like I mentioned before, It pays off in the long run. Now days I find myself paying for things with cash and doing everything I can to avoid new credit problems thanks to my new found respect for the process.
Credit Problems Negotiation
One last thing to consider is contacting your lenders and negotiating lowering the overall debt you owe. Again, explain you are in a financial bind and your working on eliminating your credit problems. Those words have an amazing effect with lenders opening the door for negotiation. In some cases lenders will reduce your over all debt considerably to keep from going to collections or bankruptcy. Never the less, take action, become disciplined and take on your credit problems because no one will do it for you!