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How to Fix Bad Credit

If you are one of the many individuals in America who is suffering from bad credit, do not be afraid. There is hope for you.

Many, many people struggle with the negative effects of bad credit. It is nothing to be ashamed of.
Once you realize that you have bad credit, however, it is important that you take steps in order to try to improve your credit score. If you just sit around and complain about how your score is bad, nothing is going to change and your score will not improve.

You have to try to improve your credit score and then hopefully you will see results. Fortunately, there are people who have gone before who have staked out what to do if you find yourself with bad credit.

Get a Credit Card to Improve Your Credit?

One of the first things you can do is to get a credit card if you don’t already have one. This may seem counter intuitive, but it can actually be helpful.

Many people have said that you have to have a good balance to have good scores, but this is purely a myth. But having and using a credit card wisely can definitely help you improve your scores.

If you don’t qualify for a regular credit card, you can usually obtain a secured credit card. A secured credit card is different than a prepaid credit card because a secured credit card is where the bank gives you credit to match the amount you deposit in the bank.

This may seem annoying and frustrating, but it is actually in your best interest to not have unlimited credit. If you have a bad credit score, then you probably haven’t been very wise with your credit in the past.

This secured credit card will help you get your spending under control. Another thing you can do to improve your credit score is to take out an installment loan.

Loans Can Help Build Credit

A good way to improve your credit score is to prove that you can handle loans and credit again. Installment loans include personal loans, car loans, mortgages, and student loans.

If you don’t need to have any of these loans, you could consider just taking out a small personal loan. This will help prove that you can handle paying back a loan.

However, it is important to remember that paying back your credit cards will help your credit score more than paying back your loans will. Therefore, paying back your credit card debt should be top priority when trying to improve your credit score.

Try to always have the goal of trying to completely pay off your credit card debt. It may seem impossible, but it is possible if you are determined and make a plan to pay it off.

It May Be Worth Hiring a Professional

You could even consider hiring a professional to help give you advice about how to better manage your finances and credit score. Although meeting with this professional will probably cost you money, the benefits will probably greatly outweigh the costs.

Try to get your balance below 30% of your credit limit. Getting your balance below 10% of your credit limit is ideal.

If you can get your balance to this place, then credit lenders will see that you can handle your credit card appropriately. It is a good idea to pay off the credit card that has a balance that is closest to its limit.
It may seem obvious, but throughout this whole process, it is important to try to minimize spending on your cards as much as possible. The less you spend, the better your score will be.

Lower Those Limits

Another thing you can do to try to improve your credit score is to decreasing your card limits to 30% of the current limit. If you can reduce it to 10% of the current limit, that is even more ideal.

Make sure to always know what your credit card limits are. Sometimes credit card lenders do not update credit card limits online, and so your score could go down if they’ve posted the incorrect limit.

Some credit cards do not have a preset limit, and so the lenders do not have to post a limit because technically a limit does not exist. This can be good and bad.

It is good because you virtually do not have a limit on your spending. It is bad because there really is a limit to your spending.

It is also bad because your credit score will definitely be affected negatively. Throughout this process of trying to decrease your credit score, it is important to not become discouraged.
It may seem like an impossible situation, but you can get help.

Your Credit Score and How it Effects Your Job

If you haven’t taken the time to think about your credit score in a while, you may want to re-think that decision. There are a lot of people that don’t see how their credit score directly affects them, but often time their credit score is affecting them more than they would like to believe. You may not even realize that your credit score, if it is bad, can prevent you from getting some jobs. The following is a list of jobs that you may miss out on if you are not taking time to care for your credit score.

First, there are a wide variety of states that will ask you to hand over your credit report if you want to be a mortgage professional. Throughout the last few years, there are many institutions that will not let an indebted individual provide financial advice and help to people in efforts to keep them from foreclosure and bankruptcy. If you are applying for licensure in this field, you may not be able to get the licenses that are required to be able to legally practice in this profession.

Second, if you want to be an accounting or financial professional it is important that you pay attention to your credit score and that you are willing to do all that you can to fix it if it is not high enough. When you are going to be handling other people’s money, it is really important that you have a good handle on your own money. Not only are people looking for the sense to be able to manage your money, but they also want to make sure that you have integrity with the debt that you go into. Going into responsible debt and ensuring that you are responsible with your finances is a good indicator that you will do the same with your clients.

Third, many people do not realize that they can be turned away by the military or even by the government if they have a bad credit report. The majority of local, state, and federal government positions will require a credit check take place before they will officially hire you.

So, now that you know that employers are looking at your credit report it is important that you understand what you are going to do about it. You should first make sure that you know what people are seeing when they look at your credit report. It is extremely important that you know what activity is being shown on your credit report. If someone has stolen your identity, you will be able to see the activity that has occurred in your name. So, when you look at your credit report if you do not recognize an account or you do not recognize specific activity, it is important that you get it taken care of as soon as possible.

If you find that you have a less than ideal credit score it is important that you start working on getting your credit score higher. Take the time that you need to communicate with any future employers about your credit score. If you can sit down and have a candid conversation about past decisions you made that you are attempting to remedy, you may not be disqualified from the job completely. Even though you may be able to explain yourself, it is important that you still work on getting your credit score back to a high number.

Start by getting rid of the debt that you are in. To get rid of your debt, it is extremely important that you understand how you are going to develop a budget and live by a budget. Your budget will need to be reasonable, but you have to understand that your budget may require you to change your lifestyle. Getting used to identifying what is necessary in your life and what is not necessary can be painful and difficult. When you are working on identifying what is necessary in your life, you will have to be very honest. You may have to make some uncomfortable lifestyle changes to ensure your extra money can go to paying off your debt quickly.

As you are paying off your debt, it is important that you understand that you will want to start by paying off your debt with the highest interest rate first such as credit card balances, short term or payday loans etc… This will ensure that you are going to be able to save money on the interest that you would have been paying had you paid off a lower interest rate before a higher interest rate.

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