Once you know your credit score, have targeted the card that is the closest to the limit and begun to pay off the debt to below 30% of your credit limit, you’re ready for the next phase in the get-out-of-debt plan—how to repair credit. In learning how to repair your credit, we’re going to employ a few tricks that you probably haven’t heard of, but that all consumers have at their disposal to improve their credit scores. If you’re already in debt trouble it’s going to require a little bit of patience, and a whole lot of discipline, which is exactly what you need in order to stick with your program of repairing your credit and possibly even getting completely out of debt.
How To Repair Credit
Always remember that maxing out your balance leads to lower scores, so the first step to repair credit is to pay off all of your credit cards, and maybe even close one or two accounts to reduce the amount of debt that you can borrow. You’ll want to close your newest credit accounts as opposed to the older credit accounts as we will see in just a little bit. But once you have your cards paid down to reasonable levels be sure that you use your cards very gently each month. Again, it’s best if you pay your cards off every month when the bill arrives as well as never charging more than 30% of your maximum credit limit at any time in every 30 day cycle.
It is this 30 day cycle that will decide whether you are going to turn to the International Debt Collection management for financial help or not but there is no problem if you can pay your bills on time, which again can be done in the best way through cards as it will be easy to manage the transactions without any hassle.
Next, be sure that the credit bureau is aware of what your actual credit limit is. Even though your credit limit may be $5000, that doesn’t mean that your lender has actually reported the information to the credit bureaus. In these cases the credit reporting agencies will take the maximum amount you’ve ever charged on the card and report that as your credit limit. So if you have a $5000 credit limit that the bank has never reported and you’ve only ever charged $2000 on the card, the credit reporting agency will send the $2000 as your credit limit. You may very well be using less than half of your credit limit at any one time, it’s just that the credit agencies don’t know that.
While there are a few card issuing agencies and banks that never report credit limits, such as American Express, most credit card lenders will report your credit limit to the credit reporting agencies when requested to do so. By using your cards very gently and making sure that your credit limits have been accurately reported to the credit bureaus you should be able to begin repairing your credit scores fairly quickly and easily.