What If I Am Credit Poor?

Introduction

A lot of people in the failing economy are suffering from a low credit score and poor credit. Having poor credit can make you get awful interest rates, declined for loans, and make your ineligible for many discounts. Some times major stores will offer large discounts just for applying to their card, however if you have poor credit you will be unable to do this and get approved successfully.

There are many different things that you can do to help improve your poor credit score and be on your way to financial freedom.

First you need to pull a current copy of your credit from all 3 credit companies, pulling from other companies such as free credit report may not always have the most up to date information that is available.

 

How you can improve your score today

• DELETE ALL OF YOUR COLLECTION ACCOUNTS

By paying off a credit account, did you know that your score will actually go down? This seems unfair, but the way that credit companies work is by reporting the most recent activity. By simply paying off a collection account, this will show the account as a "current" account. The best possibly way to handle this is to contact the company or collection agency who is holding the account. Agree that you will pay off the account on condition that they do not report to the credit companies. Ask them to send you a letter stating this in writing, that upon a receiving payment from you that they will delete references from it being a "collection account".

• GET RID OF PAST DUE ITEMS

Once you take a look at your credit report, look and see if any items are showing up in a past due status. If this is accurate information, then call the creditor and get this resolved immediately. If you feel this is an error, call the company directly asking this why this is showing on your report. If you need to, file a dispute with the credit bureau. If you have had any accounts that were previously reported as past due, ask the creditor to remove this from your report. Be tactful when asking and be polite in asking. Explain to them that you enjoy being with their company, but if they fail to remove that you will take your business elsewhere.

 

 

 

More advice...

• DO NOT CLOSE YOUR CREDIT CARDS

It sounds odd that you should not close out any accounts, however the way credit scores work is by a available/debt ratio. You want to show a lot of available credit and a very little balance. Anything with over a 60% balance is considered to be a large risk to most other creditors. If possible you should try to keep your balances at or below 30% below the total credit that you have on the card. By doing this it will show other companies that you are a responsible card holder and it will also help your poor credit score go up.

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