Beginning to reestablish your credit can be a very slippery slide. There are companies out there that will not hesitate to take advantage of your financial situation. Companies that offer you a debt solution in little or no time are not telling you all the facts. The truth is that reestablishing your credit is a very slow process and takes time. Credit companies are aware of the fact that almost all of your credit problems can be solve on your own, and if they do not point this out to you, they do not have your best interest in mind.
Unfortunately, there are credit companies that work out illegal arrangements just to get ahead in the industry. There are, however, legit credit companies that truly will try to help you get out from under your debt at no cost to you. If you do your research you will find that the marketplace is full of solutions to helping you repair your credit. The local library is such a source that you have unlimited access to, and it is free. Don’t be afraid to shop around and take advantage of the sources that are out there to help you reestablish your credit.
Because there are those companies that don’t hesitate to take advantage of you, you need to be cautious when it comes to choosing a credit company. Make sure you understand all of the terms and conditions of the agreement before you make your final decision. The following are some simple guidelines to help you decide which credit company has your best interest in mind.
The first thing you should check when choosing a company is what interest rate they are offering. What your interest rate is on your payments can make the difference in how quickly you can get out of debt. Even though making your full payment is ideal, sometimes that is not possible. When this happens be sure you make the best choice available to you. Your interest rate will apply on all minimum payments. An example of how your interest rate affects your payment is below:
Balance owed on account: $350.00
Interest Rate: 5.7% (.057)
Minimum Payment: $19.95
Unfortunately, that $19.95 cannot be completely subtracted from the balance. The majority of that payment will go to paying off your interest. Remember that you have to add .057 to your balance every time you make a payment. At this rate, your balance will go down, but it will be a slow process.
It is imperative that you make your payments on time if all possible. Payments made before 30 days can get a bad review by creditors, and payments made after 45 days are considered late. This takes some planning, but making your payment at the right time is very important.
Try not to apply for credit more than three times a year. Checking your credit appears as if you’re shopping for credit, which will not look good to creditors. You can keep track of how many times your credit has been tapped by looking at your credit report. Your credit report is good for 2 years, after which the accounts start dropping off. No matter how tempting it may be to except credit offers, remember the long terms affect of such actions.
Keeping all your records from creditors is one of the best ways to protect yourself. Sometimes creditors do misplace payments or loose their records, so it is in your best interest to make sure that you’re protected from your side of the payment. It is also suggested that you keep a copy of the contract that you make with any creditor. Knowing your contract can protect you if disputes between your creditors ever arise.
The most important advice about repairing and protecting your credit is to acknowledge your ability to make correct choices about your credit. The benefits of having good credit are endless and can make your life more full and enjoyable.