Everyone knows how important your credit score can be, especially when trying to get a loan or buy a house. That’s why a poor credit score can be a real obstacle—and a few small mistakes can have a significant financial impact. When you’re trying to recover from a poor credit score, it can feel like there is nothing you can do but wait until seven years have passed and the late payments or delinquent accounts can be erased.
Luckily, this isn’t true. There are a few simple tricks you can use to improve your credit right away. Use these four ways you can fix your credit fast wisely, and you’ll discover just how much a few simple practices can heal your credit.
Negotiate. Life is full of unforeseen obstacles; even creditors know that. That’s why you can often negotiate with creditors to remove defaulted debts or mark them “paid as agreed” in exchange for paying down part of what you owe. You may even be able to ask for a “goodwill adjustment” on your credit history if you had a long-standing good record of payments before the event that caused you to make some late payments. They may refuse, of course, but you lose nothing by negotiating for better treatment. If you have had little success on your own, you can even hire an attorney to negotiate on your behalf. Just remember, however, to get any agreement in writing before taking action yourself.
Underuse your cards. Even if you pay off the balance of your credit card every month, maxing out your cards regularly still hurts your credit. To ensure a better credit score, you should never spend more than 30 percent of the maximum allowed. In fact, this so-called “credit utilization ratio” is actually a part of the formula that determines your score and to get the best possible score, you should never use more than 10 percent of the credit available to you.
Pick one or two “go-to” credit cards. Many people think it’s better to spread small payments out across a number of credit cards, but the reality is just the opposite. It’s always better to simply have all your small charges in one place (so long as you don’t go over the 30 percent utilization mark). That’s because how many of your cards have balances is factored into your credit rating. It’s actually better to have a $120 balance on one card and a $0 balance on two others than to have a minuscule $40 balance on each.
Pay your bills twice a month. It may seem like a small action, but paying down your credit cards twice a month can actually have a significant impact on your credit score. Because you’ll be paying off some of the debts accumulated that month before your credit card balance is officially reported to the credit bureaus, your credit utilization ratio will look healthier—no matter how much you may have needed to use the card throughout the month.
By taking advantage of these three tricks, you should see a quick improvement on your credit score. Other steady changes, such as progressively paying off your debts, paying all bills on time, and finding and disputing potential errors on your credit report will take your successes even further. Before you know it, you’ll have a solid, good credit score and better overall financial health.
Receive Help You Need from Cleveland Bankruptcy Attorneys
Of course, sometimes these actions alone are not enough to get you out of a tricky financial situation. No matter how careful you are, sometimes circumstances can allow debts to get out of hand. In these cases, options like bankruptcy may offer needed relief and give you a second chance at a clean financial slate. Call the Cleveland Bankruptcy Attorneys Luftman, Heck, and Associates today at (216) 586-6600 for a free consultation on your unique situation and to discuss all your options. We can give you impartial advice on how you may be best able to regain financial freedom.