If you have had a misfortune for the past years financially, you will not be having a good credit score. And you are not alone in this misfortune. Due to the recession and the financial crisis, credit scores of some people have plunged. The credit score determines if you are eligible for a credit card and how much interest you will pay, the insurance premiums and your chances of getting a job, among others. Therefore, it is very important to maintain your good credit score. Here are some of the easy ways you can repair and maintain your credit.
A good place to start with the rectifying process is your credit report. You are titled for one free copy of your credit report each year. So, if you haven’t ordered it yet you can order it now. Once you have the report with you, you should take a good look at the report and identify any errors made by them. It is enough that you have made some mistakes of your own, but you need not suffer for the mistakes they do in reporting. According to a survey, about seventy percent of the reports contain errors, so it is most likely that there might be some errors in yours as well. If you find any mistakes, you should get it corrected with the reporting agencies.
The next thing to do is to make up for the missed payments. If you are not able to make your payments on time, you should work out a plan with the creditors or take help of any nonprofit counseling agency to negotiate for you. Once it is settled, you need to make sure that there are no more late payments from now on. Any debts or any bills that you have for rent and other utilities should be paid on time.
Your payment history is one the most important things you should keep in mind. If you are prompt and have a good payment history because you used to pay everything on time, you can also get letters of recommendations from such companies if you apply for credit. To maintain a good credit, you need take a credit in the first place. So, you can go and ask if your bank provides a secured credit card. These cards collect money for any missed payments from your special saving account. This will reduce the risk of the bank but you might need a co-signer for you to qualify. After a couple of months, you can upgrade that to an unsecured card after making the payments on time.
Next to payment history, the most important thing is the amount of credit that you actually use. You should pay as much as possible of the debt on the credit card and don’t close credit cards because the important thing is how much amount you owe as the percentage of the total amount of credit. Closing the credit cards which you have held since a long time is not a good option as it affects your length of credit history. Follow these steps to protect your credit and maintain it for long time.