Fixing your credit is attainable. Whether you have a few bad beats on your history and you just need to get rid of some debt or you are dealing with identity theft and a giant problem, you can always fix it.
Repairing a big credit mess could take more than just a new spending pattern and a flood of extra income. Sometimes a person’s credit history is so pocked with late payments and defaults it takes dedicated professionals to wade into the morass and clean up the problems.
There are some steps you can take, once you find out you have bad credit, in order to move forward and fix your finances. They require proactive steps to fix your debt-to-balance ratio, consolidate your debt and scour your credit reports for inaccurate or outdated claims.
Credit Utilization
This refers to the amount of debt a person in relation to his or her credit limit. The rule of thumb is to keep your credit utilization ratio at around 30%. That indicates that a borrower can use credit responsibly. When you use all or almost all of your credit card balance, it shows that you are a bit of a profligate spender. And paying down balances to get closer to a 30% utilization rate is something you can do right away.
Getting Rid of Negative Items
Cleaning up your credit report is important to fixing any sort of credit problem. You can try to handle it yourself, but contacting creditors and the credit reporting companies to remove inaccurate items or you can engage the services of a company that handles this sort of thing.
The professional help route is especially tempting if you have a bankruptcy, divorce, tax lien or other complicated issue with your financial history. Collections and late payments are simpler and possible to handle individually. The big stuff? It probably makes sense to call the cavalry.
If you need to call a professional, do the research first. Find out what companies out there perform these services and how much they charge. Scanning websites with information on these is recommended.
No matter how you got yourself into this mess of debt, you can get out. It just takes dedication and, sometimes, a little professional help!
