Most of the people have a credit that is OK, but they find that their credit rating is not up to the mark to get loans and other finances. For this they need to improve their credit rating so that they can get what they want.
There are many reasons for not getting a good credit rating. You might have paid your bill late or would have forgotten to pay your bills due to unavoidable reasons like being ill. There is stillroom to improve your credit rating.
The first step to improve your credit rating is to get the information needed on your credit. There are credit reference agencies available that can give you the required information about your credit on after paying a small fee.
Credit rating report can be acquired online by requesting one through one of the major credit rating agencies like Equifax. Here you will be able to regularly check your rating. They can also be sent by post.
Get that information and check whether there is any incorrect information on the records. If it is there do make the necessary steps to correct them to reveal the right one.
Your credit rating dips further when there is any rejection from a creditor. This could be due to incorrect information on the records. Hence it is necessary to correct it at the earliest.
Ensure that you pay your bills on time always. This is very important for the lenders to give you any credit in the future. They would refer to your bill payment history before they pass on the credit to you.
Some people tend to apply to the different agencies when they are turned down by one agency. This should not be done. Without correcting your credit rating the other lenders also will turn down and you might get all the turned down lenders registered in your records. This would make the situation worse.
If you are separated from your family then it is necessary that you have a separate record so that the default made by your family does not affect your credit rating.
Paying of the debts
Pay off the debts that you have so that you can perform credit report repair and also improving your credit rating. This certainly improves your credit rating. Some people tend to close their old paid off accounts. Do not do this. This action will reduce your overall credit.
You can approach a credit counseling service to chart out a plan to repay the debts you have. There is no need to be afraid of the counseling services. They will help you in getting a different repayment plan, which might work out, for you and hence your credit rating can be improved. The last thing is to stay away from bankruptcy.
Transferring all debt into a single repayment plan
If you have taken on too much credit i.e. holding various credit cards or loans for any other purpose and are not able to meet repayments, you could get in touch with a credit repair firm.
They will contact all your creditors and come to an agreed repayment plan based on your ability to meet repayments by taking into consideration your salary and expenditure.
The firm will then disburse the agreed amounts to the creditors. This situation comes to a nice compromise where you are happy with affordable repayments and are able to improve your credit rating and the creditors are happy to get their money back, albeit more slowly.
Beware of very long repayment plans
Although the longer repayment plan may suit your circumstance, as you will be able to pay more affordable amount each month, an excessively long plan will mean you could end up paying a lot more than you intended thorough interest payments. Of course, the more times you pay interest the more you will end up paying overall.
Fixed or variable interest rate
This is an important note consider. The credit repair firm may offer either varying or fixed rate of interest on your monthly repayments. You have to assess if it will be worthwhile fixing the interest.
If the interest rate were historically low, then it would be beneficial to tie up your repayments to fixed interest. If however, if they are historically at high rate, then variable rates maybe beneficial as it could come down.
