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How To Improve Bad Credit

by guest on February 3, 2012

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(The following is a guest post on behalf of Compare The Market )

Having a low credit score can really put a damper on your life. Credit scores are used to determine interest rates, loan eligibility and can help determine whether or not you can get a house or apartment.

Your score is an important facet of your life and working hard to maintain a good credit score should be a priority. Here are some ways to improve bad credit !

How To Improve Bad Credit

Find A Credit Balance You Can Pay Off

Poor credit credit cards are going to be a lifeline for you in this situation. Find a lender that is willing to extend you a credit balance despite your bad credit. Getting the credit card will increase your credit score all by itself. Paying off the balance on time will establish a positive credit history that will work toward increasing your score in the long term.

Learning how to pay off a balance on time can also teach you better money habits, and will definitely help you to fix poor credit .

Settle Your Balances If Possible

Contact your creditors and see if you can settle your credit balances. This will allow you to pay off your debts for less than you owe. Not only does this abolish your debts, it also allows you to have your credit balances reported as paid in full.

A credit report free from past due balances can allow your credit score to rise very quickly. Most creditors

are going to be willing to listen to you when you offer a debt settlement.

Consolidate Your Debt

Debt consolidation can make it easier to manage that debt. Some people have low credit scores simply because they could not remember to make the payments on time. Having a single payment to make each month will allow you to keep track of the payments you owe to creditors.

You can make it even easier on yourself by telling your bank to automatically make the payment each month.

Find Co-signers To Improve Bad Credit

Finding a co-signer can make it easier to qualify for a loan with better rates than a bad credit loan. Lower interest rates and higher loan balances can make it easier to get the loan you need to get out of debt. The big thing here is to make sure that you are paying off the balance on time in order to keep your co-signer from having to pay the bill.

Paying off the loan on time will make it so that you do not have to get a co-signer for your next loan.

Establish A Relationship With Your Bank

Financial institutions have to rate you based on a credit score because they need an objective measurement of the risk being taken. However, developing a track record with a lender can go a long way toward easier lending requirements. Credit unions are local establishments that have ties to the community that they serve and generally are more willing to lend to those with less than perfect credit.

Leveraging a relationship with a local lender can make getting a loan possible.

The bottom line is that you have to adjust your spending habits if you have poor credit. Find a lender who will take a chance on you and pay the balance off on time. Doing this will allow you to enjoy a higher credit score and benefit from the perks that go with it.

© 2012, guest. All rights reserved.

Category: Credit

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