Considering that 2.8 million jobs were lost in 2008 alone after the market crash, it’s safe to assume that a turn for the worse in terms of credit ratings is not always at the hand of the consumer. You may not always earn that cushie income or a health issue could drain out the savings. Whatever the reason, the inevitable outcome tends to be a drop in the credit score. Not only is having a good score crucial to secure debt – and at good rates – but it can also affect other things such as leases and phone line agreements. Here’s how to get that score up, and fast.
Get A Handle On That Debt
This may be a painstaking process, but once done, it gives you a clear idea of the severity of the situation. What this exercise should reveal, is the following:
How many installments are there per month
Rank lowest to highest installments
Rank lowest to highest interest rates
Figure out which of these payments include essentials such as housing, utilities, food, and clothing
Find out whether any of these bills are with debt collection agencies as yet and if not, try to make arrangements before they’re handed over
With this information, it’s easy to work on a plan to get those payments sorted as a budget is a critical part of successfully busting bad debt.
Ask For Help
Many financial institutions have special divisions that deal with customers who have defaulted or who are likely to default on their loans. Although this doesn’t save you from legal proceedings, it may just buy you some time before the derogatory information hits the credit bureaus. They may also provide you with access to restructuring or refinancing options that could lower installments, thus freeing up the cash flow slightly.
When Things Have Already Gone From Bad To Worse
When your score is in the red, it may seem like there is just no getting through it. Many who find themselves in the red simply don’t know where to start and constantly checking the score could also have an adverse effect on the rating itself. When it comes to bad credit, AAA Credit Guide (https://aaacreditguide.
The Investment Of Time
It takes a matter of months to get a credit score down but it can take years for the score to improve again. This depends on the severity of the defaults as some will need to be paid back entirely before the credit score will budge. You need to work at it every day as every bit of effort will contribute to an improved score.
There are many means to increase a credit score, such as applying for a secured credit card or lowering credit limits and sometimes closing the accounts entirely. While it may take a while to creep up, slow progress is better than no progress at all.