Today the average person tends to use credit cards or installment loans to pay for things. But then debt gets out of hand and income doesn’t cover payments. The results are late fees added on top of late payments and negative feedback on your credit report. However, you can participate in credit repair, the process of improving your creditworthiness, by using credit cards effectively, with these simple steps.
1. Review Your Credit Report – Begin by looking at your credit report to see where you can take action. Search online to get a copy of your report for only a couple of dollars, or free if you’ve applied for credit recently and been denied, by heading to the three main credit bureaus: TransUnion, Equifax and Experian. Get your local banker to help you read the reports, if necessary, to understand how your credit and payments are posted. You want to search for any errors, like if someone’s been reporting payments to the wrong account or there’s identity theft, etc. Plus look to see if good accounts are being omitted so that you can get those on-time payments posted. If there has been a history of high medical bills or other major emergency issues come up that have taken a lot of your money lately, you can add notes that can be added to the bottom of your credit report. The notes do not cancel out debt or negative ratings, but they can help offer information to creditors so that they can help you better handle your debt management (next step below), if possible.
2. Establish Debt Management – Next, look for alternative solutions to help handle your cash flow. Search online for credit cards that offer lower rates and no or very low balance transfer fees. Many cards have 0-3% interest rates during an introductory time period with zero transfer fees. So look around and do your homework, taking notes on which cards offer the best opportunities. Also work with the financial institutions, explaining your financial troubles to see if they can reduce rates, waive late and other fees and lower your minimum payments until you get caught up.
3. Get Help – Don’t go this alone. There is no shame in seeking advice and it’s available for free. So seek help from online and financial magazine articles, your banker and other trusted advisors on money management, credit repair, setting and sticking to a budget, debt management, credit cards and money-making opportunities by moonlighting to help pay the bills.
When it comes to credit repair and credit cards, instead of charging more, take charge of the situation. Get help and tackle your responsibilities in a responsible manner by using credit cards effectively with the steps above.