It takes time and effort, but those suffering from bad credit can bounce back by prioritizing, coming up with a strategy and sticking to it. There are several factors to be considered and looking at the big picture is essential to success.
Bad credit is no fun, but it's not permanent. As hopeless as it may feel there are things people with bad credit can start doing now that can begin to improve their credit scores. It's not instant and it's not always easy, but patience and commitment will pay off and gradually bring a credit score back up to where it should be.
The first step for people in this situation is to find out what exactly their credit score is. They can't get started without knowing what areas they need to work on. A credit report outlines the accounts hurting their score, and many companies online offer free credit reports. Having this overview is an important first step in prioritizing and creating a game plan.
Quit spending! New credit card purchases will increase the balance to credit limit and this ratio is an important factor affecting one's credit score. The higher the balance, the more impact it has. Whenever possible, purchases should be made in cash. This helps shoppers manage money and prevent them from spending money they don't have.
Paying off balances should be a priority, as should making payments on time. The further behind one is on payments, the greater affect it has on their credit score. If those in debt are having trouble keeping up, they should at the very least contact the lender. Credit card issuers may be willing to delay a due date or re-age an account. They are more likely to work with borrowers when they are proactive and make the effort to maintain communication.
It may be tempting to close a delinquent account, but sometimes this can negatively affect credit as well. The amount that one owes in relation to the credit they have available matters. Closing an account could increase their utilization (sum of balances divided by sum of credit limits) and lower their score.
If debt has already gone to collection, it's best to communicate with the collection agencies. Avoiding calls doesn't solve the problem. Many creditors have temporary hardship programs that can reduce payments for those who are struggling.
Co-Signer.com knows it's not easy recovering from bad credit and that some people need a hand while getting back on their feet. They act as a lease co-signer for those who have a bad credit score affecting their ability to secure a rental home. Visit Co-Signer.com or call (855) 267-4461 to see how they can help.