If your debt problems are spiraling out of control and you are left with no other option but to settle credit card debt, then it will certainly hit your credit score badly. With a blemished credit history it is pretty difficult to invest in real-estate market or qualify for a mortgage. If you are going through similar situation and looking for a way out then this article can certainly help you out. Read on to know a few steps which can minimize the damage on your credit history and improve your credit score in less than thirty days.
1. Your first and foremost duty is to obtain a recent copy of your credit report from three major credit bureaus – Equifax, Experian and Trans Union.
Contact your bank and creditors and thoroughly review your monthly statement to determine what your credit limit exactly is for each revolving credit card accounts that you currently hold.
2. Make sure the credit limits recorded on your credit reports are accurate and in case you find any discrepancy for example you have a higher credit limit than what is listed on your credit report, call your lending institutions and ask them to update the proper information right away. Rectify if there is any easy errors on your credit report like credit-related items that exceed the 7-year time limit or negatives that you can easily prove are not yours, or accounts that are still listed as unpaid and eventually lead you into bankruptcy. Settle these disputes online by directly negotiating with the credit reporting agency without wasting any more time.
3. You r next step would be paying down your balance on each individual card so that the balance remains less than 25% of the credit limit for each account. To accelerate this whole task of posting of the payment to your account, take online help.
4. If you have a good payment history and you pay off your balance in full each month it will work in you favor. Make sure do not charge more than 50% of your maximum credit limit on any particular month. This is because your available credit is typically averaged over each 30 day billing cycle.
5. Scan through your credit report minutely and mark the late payments if you have any. If you are lucky enough and get a clean cheat then it’s all well and good but in case you find out you have one or two late payments, attempt to clean the payment records by calling applicable creditors and by requesting them to remove the negative information from your credit report. Keep you fingers crossed; chances are there the respective creditors might be willing to do so, particularly if you place your request formally in letter form.
6. If there are some small collections on your credit report which are $500 or less, you should take the initiative to contact the appropriate collection agency and convince them to remove these negatives from your credit report. The collection agency might agree to your proposal if you offer them a little money. Remember, you are strictly recommended not to pay off the collection agency unless and until you get the agreement in writing from them.
Follow the above mentioned simple steps and bring some drastic changes in your credit score.
