Retrieve Your Credit Score, After a Debt Settlement- Know How
It’s true that settling your outstanding debt can tarnish your credit history, as you are paying much less than what you actually owe. In fact, during settlement, a number of late payment get recorded on your credit report and not paying your creditors for quite a few months and ultimately paying a lesser amount can take a huge toll on your credit. However, you can certainly recover your poor credit as soon as your debt settlement procedure is over. If you have determination and a strong urge to bounce back, you can follow the points listed below to get your credit back on track.
* Your first and foremost duty is to obtain a credit report from all three credit bureaus (Equifax, Experian, TransUnion). Comb the report thoroughly to verify the status of accounts on your credit records. After settling your unpaid bills, if your credit report still shows “Unpaid” or “Delinquent” in place of “Satisfied” or “Settled” rectify the discrepancy immediately.
* You next step should be building a rapport with your creditors, so that the creditor would agree to eradicate all negative information from your credit report. In fact, if you can convince the creditors to give consent for a Pay for delete agreement, it can minimize the adverse impact of debt settlement on your credit report. You can also request your creditors to renew your credit status as “Paid as agreed” or “Paid in full”.
* With a blemished credit score, you might face difficulty to qualify for a standard credit card, but you are always eligible to get a gas/department store card, which involves no credit check. In fact, once you repair your credit to some extent, you can ask them to elevate your credit limit.
* Remember, closing a number of accounts at one time can hurt your credit completely. It’s better to close one or two accounts every 6 months and keep some of your older accounts open, because the length of your credit history plays a crucial role in building good credit history.
* Build up a saving’s account to curb the chances of payment default and late payment and prevents further damage to your credit score. A well built saving’s account can work as a collateral for a secured credit card. A secured credit card work as all-in-one checking, a secured line of credit, savings in a rainy day.
* Pay all new lines of credit on time and if possible, before the due date in order to report positive on your credit report. Make sure you maintain the balances low on all new debts. Be certain that you pay back all the debt that you could not settle like rent or student loans in order to avoid delinquent status of your account.
Last but not the least, avoid pay day loan trap and join credit union to recover your credit score sooner than before.
