Credit Solutions to Change Your Life

Bad credit can negatively affect various areas of your life from personal finances to job opportunities. People with bad credit cannot easily qualify for financing, and getting loans may require finding a co-signer, paying higher interest rates and receiving undesirable loan terms. Solutions to help fix your present credit standing can open the door to better financing opportunities.

Debt and Credit

Getting rid of your debt or at least lowering your credit card balances can greatly improve your credit history. This move helps build a better credit score, and with a higher rating, you can qualify and receive favorable rates and terms on mortgages and installment loans. Having a good credit score also helps you secure cheaper insurance rates. If you apply for a job with a bank or credit union, a good score can help get your foot in the door. Pay more than your minimum and stop charging to erase balances.

Bill Payment

Give your credit score a boost with on-time payments to mortgage companies, auto lenders and credit card companies each month. Payment history makes up 35 percent of your credit score, and this is the biggest factor affecting your personal rating. Break the habit of paying bills at the last minute, which can result in accidentally forgetting and submitting the payment past the due date. Open statements early and write down due dates or consider automated payments to help fix a bad payment history.

Frequent Monitoring of Credit

Taking a look at your credit reports at least once a year can help solve credit problems and help you qualify for loans easily. Lenders decide credit and loan approvals after evaluating your credit reports. A bad credit report with judgments, liens or collection accounts can harm your chances of qualifying. Get your reports from Annual Credit Report and diligently dispute errors made by creditors and lenders to help improve your score.

Pay Old Debts

Creditors and lenders will remove negative items reported in error. But if you have legitimate charge-offs, collection accounts and judgments, these entries can blemish records for up to seven years. Work to get these items deleted by paying off the old debt, and then asking the reporting creditor or lender to either delete the negative remark, which helps improve your score, or update the status of charge-offs and collections to "paid."