More tips for a better credit score
Improving your credit score will pay off in lower interest rates, lower insurance rates, and better terms. Three major bureaus, Transunion, Equifax and Experian keep track of your credit history and scores. If your score isn’t what it should be here are a few more tips.
Collection Agencies
If the lender is positive you won’t pay the account in full, and it’s been 6 months since you’ve made any payment at all, they may sell the account to a collection agency for pennies on the dollar. Literally a $5,000 debt may be sold for $100. The agency knows it won’t collect on every debt and it knows the odds are it won’t collect the full amount. But it will go after you in the most aggressive way that’s legal. A debt turned over to an agency is an indication you’re on a downward slide financially. Even if you pay off the debt to the agency that black mark stays on your record.
If you owe money, the person or company that you owe it to, has the right to report it to the credit bureaus. Libraries, doctors, small businesses, even clubs you’ve joined that have a contract can and do report nonpayment. Don’t let these little bills ruin your credit. Pay them and have the notices removed from your report.
Negotiation is a no no
You can negotiate interest rates, application fees, and late fees. But don’t negotiate the amount you owe. It’s a short term victory. If the creditor agrees to settle for less than you owe, the amount you didn’t pay will be reported to the credit bureaus and will stay on your record for seven years.
Time is on your side
However negative your credit report is now you can clear it up in time. Make payments on time from now on and you’ll start to see that score go up. Creditors look at the total score but they also look at the most recent payments. If your score is climbing upwards because you’ve been responsible with your credit and payments that’s a better sign than if your recent history shows missed and late payments.
Work on improving your credit score and you’ll start to see results.
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