We have all missed a payment, maxed out a card, or made other costly mistakes with our credit. It may feel like it’s impossible to rebuild your credit score back in good health but don’t worry! Here are some tips on how to correct those mistakes and get back on track.
You’ve Missed a Payment
If you are a person who does not normally miss a payment, you can contact the cardholder and ask for the fee to be waived. The late fee is a warning that you missed a payment, but the missed payment will not be reported to your credit report until you are 30 days late. The danger of a missed payment is that it can drop your credit score substantially. A remedy to missing a payment is to create a system to alert you when the payment is due. Some cards will even let you schedule your payments throughout the month to help you manage the rest of your payments.
You’ve Maxed Out Your Credit Limit
It is recommended that you only charge up to 30% of the credit limit. Sometimes you cannot avoid going over this threshold. If you are only doing this occasionally it can be ok. If you are doing so regularly it will decrease your credit score. A way to avoid going over the threshold is to use your credit for some purchases in the month and then switch to cash or check for the remainder of the monthly expenses.
You’ve Spent More than You Can Afford to Pay Back
Credit cards are designed to allow you to use your credit line and then pay back a small portion of debt per month. This can quickly place you in a repetitive cycle of minimum payments and maxed-out credit cards. Check your balance throughout the month to see where you may be able to cut back on additional spending. This will allow you to adjust your credit card use accordingly to help you stay in line with your budget. The idea is to pay down your balance as soon as you can. If you are in over your head it may be helpful to consult a bankruptcy attorney to understand your options for getting out of debt. Contact Moseman Law if you’re needing to declare bankruptcy.
Will Closing Credit Card Accounts Help?
Your credit score is based on the length of time you have held a card. It can feel good purging your wallet of cards that you don’t need or use, however, you want to assess the length of time you have held the card and the credit limit on the card before you decide which card to cancel.
Why You Should Always Review Your Credit Card Statements
You need to look at your bill each month to ensure that you have not been the victim of credit card theft or that the charges you thought you canceled are in fact no longer being made. You only have a certain time to dispute the charges and if you find a discrepancy, contact your cardholder at once to dispute and correct the charges.
For Financial Hardships, Contact Moseman Law
If you or a loved one is experiencing financial hardship, contact Moseman Law. Bankruptcy laws are complicated. At Moseman Law Office, LLC we’ll handle the paperwork for you and we’ll make sure that you understand the process. Contact us today and let us answer your bankruptcy questions.