If the communication breaks down between you and your creditors, you are in trouble. Talking with the lenders that you have chosen to do business with is the best thing that you can do to resolve credit issues, no matter how bad things have become. If the situation can be fixed, they will help you to explore ways to keep you in good standing. If not, working out a payment plan that will keep you out of collections is in your best interest.
Seeking Higher Credit and Better Terms
Lenders want your business. They value customers who perform as expected and manage their accounts well. If you want more credit, better terms, a better interest rate and more perks with your credit card, you will have to demonstrate that you are a good risk. They will, however, be looking at your entire credit report. Creditors will easily forgive past mistakes, as evidenced by the offers of credit made to people emerging from bankruptcy. The credit, however, will be on their terms until you demonstrate that you can manage your affairs properly.
Resolving Credit Issues
The Fair Isaac Corporation, creators of the FICO system used by all three major credit bureaus, advises consumers to first notify the credit bureau in writing including your complete name and address, if there is a mistake on their credit report. Do not send original documents or receipts. Explain the items on your report that you dispute, state the facts and explain why you are disputing it, then request a correction or deletion. Secondly, write the creditor involved in the error, and provide it with the same information you sent to the credit bureau.
What Creditors Do Not Tell You
In you own a home, the terms and interest rate you pay are dictated in the loan agreement you signed with your mortgage lender, but the terms and interest rate you have with your credit card accounts may be open to negotiation. If you are in good standing with your account, and your overall credit is improving, you can call your credit card company and negotiate such things as your interest rate, your credit limit and your annual fee. While you are at it, you can ask them to move your due date or remove a late fee.
Rebuilding Credit After Resolving Credit Problems
If you have emerged from a rough financial period, maybe even a foreclosure or bankruptcy and your credit has taken a beating, start to repair your credit score as quickly as you can. Begin by reviewing all three of your major credit reports. Dispute and document any mistakes you find on your reports, solve any problems with current creditors, slowly close any unused accounts, do what you can to add positive things to your credit report and lastly, open a savings account.
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