With so many consumers being hit by layoffs and cutbacks, it’s not surprising that mortgage, credit card, and personal loan delinquencies are on the rise. Just a few months with no income can deplete savings entirely, so that when you do get back to work, you’re deep in the hole.
If you find yourself facing a poor credit report because of late payments on your mortgage or other accounts, time will eventually be on your side and your credit scores will come back up.
However, if you see yourself needing to use your credit again in the not too distant future, you can take steps to hurry the process. Your job will be to pile positive information on top of the negative.
First, be sure you don’t have another late payment! Set aside money each month until you have sufficient funds to pay every statement on time, even if your paycheck is a day or two late in arriving!
Do your best to pay down balances, and shift your debt around so that no credit card carries a balance of more than 50% of its credit limit.
Avoid the temptation to close credit card accounts – especially those you’ve held for the longest time. A long history with the same creditor adds to your credit scores.
Use a variety of credit – such as your mortgage, your credit cards, and an installment loan. Just be sure that the business that offers the installment loan does report to the credit bureaus. Not all do.
Get your free credit report and read it carefully, looking for errors. Since experts now estimate that 70% all credit reports do contain errors, chances are you’ll find at least one. Correcting negative errors will give your credit scores an instant boost, so taking the necessary steps is well worth your time.
With the exception of bankruptcy and foreclosure, all negative information has to be removed from your credit report after 7 years. But that doesn’t mean it always gets done. If you find such accounts on your report, contact the credit bureau and ask to have them removed.
If you have charged-off accounts that are less than 7 years old, and if you now have the means to repay them, do it. That will remove the blot from your credit report. If your report is showing past-due accounts that have not been charged off, bring them current.
Remember that while negative information will remain for 7 years, its importance and its impact on your credit report and scores will diminish over time as you build positive information.
FreeCreditScorequick.com your resource for free credit report offers and the most current information regarding credit news. We also provide free tips and techniques to repair your credit for free. “Remember your credit report and credit score is more important than ever now.”