Repairing your Credit Rating

Paying your bills on the due date or before, is one way of keeping your credit score from dipping. This is especially so with credit card payments, and higher purchase payments.  By always making sure that you pay your credit card on time, or any kind of higher purchase payment on or before the due date, you will always keep a good credit score.

The trick to this is being organized enough to be able to sort out the bills that need paying and the ones that can be put on the back burner for a bit.  So, things like mortgage payments – which is vitally-important, payments toward your car, or any other kind of motor vehicle, that need paying on a regular, monthly basis, must also come into the ‘vitally-important category.

So, any type of higher purchase bill, or credit card payment, including medical bills, must be paid without delay, otherwise you will see your credit rating dip. The less debt you accrue the more your rating will go up, that is how it works.  If you pay your bills regularly, then you have nothing to fear about your credit rating falling.

It is when you begin to lose control of your finances, that things then get out of hand.  Again, it is all about becoming organized with your money, not disorganized.  Because disorganization leads to too many credit checks and can see you fall into the red, instead of the black. 

The word here is ‘organization’. Know what needs to be paid and make sure that you put the money aside to pay it.  Again, things like utility bills, as well as all those mentioned above, have to be paid.  Paying your gas, water, and electricity on time, will save you in the long run from falling behind.

Yet there are too many people who are simply not organized enough to be able to manage their money sensibly. This is especially so when it comes to credit card debt.  This is because there are still too many people who believe that having a credit card means ‘free money’. 

Indeed, credit cards can then become not unlike lethal weapons, if they are in the wrong hands. People spend the money that they believe is ‘theirs’ but are shocked when they receive the credit card  bill at the end of the month.  Panic then sets in,  and then the spiral of debt begins – meaning their credit worthiness begins to fall.

The trick to this is being able to budget your money in a sensible way. Everyone must know, more-or-less, how much they will spend on bills in any given month. Mortgage payments, credit card payments, higher purchases  and utilities, such as gas, water, electricity must be paid, that is a given.

Once you have put money aside for those important bills, then the rest, should come easy.  One way of raising your credit rating is not only by paying your bills on time, or before the due date, but also by paying through your bank.  By paying your bills by direct debit, and making sure you have the money in the bank for when the bills are due to be paid, you can see your credit rating rise. The bonus about paying your bills through the bank is that it you do not have to remember when to pay the bills, as the money is taken automatically.

Of course you have to remember to have the money in the bank, in order for the bills to be paid. If not, then you will only build up bank charges as well as the original bills you still have to pay.  And bank charges [penalties that banks place on customers who do not have enough money in their accounts to cover their bills] can build up to a hefty sum of money.  So, at the beginning of each month. sit down and sort out which bills have to be paid, and which bills are less important. Then make sure that you place enough money in your bank in order to cover those bills.

Paying by direct debit can see your credit rating rise, if you pay regularly and on time. This can also lead to discounts as well, in terms of discounts in your electricity, gas and water bills – if paying through the bank.  If you feel that you are about to slip into debt, then you MUST contact the companies that this will affect. Explain to them that you  are having financial difficulties and would it be possible to lengthen the time they have placed on you to pay your bill/s. 

Nine times out of ten companies appreciate early contact, and will be only too willing to help their customers who find themselves in financial difficulty.  However, by hiding the problem away, and thus falling deeper into debt, will just see your credit rating fall even more.  Companies do not like it when customers ignore their letters. And, they are less likely to react kindly to you if this is the case. So, any early debt problems must be nipped in the bud before they spiral out of control. 

By contacting the companies involved and explaining to them your situation, a financial plan can then be worked out. This would be a legally-binding document, involving yourself and the company involved. A new contract will be written by the company, if they agree to lower your payments or lengthen the time you have to pay.

Any late payments after that, you will then be liable for the payment of the bill in full – as well as any charges on top of the original bill.  Also, be wary if you are thinking about ‘debt consolidation’ [taking out a loan in order to pay off all your bills in one go]. Click on the link to find out why.

By paying your bills on time or early, you will cut out the worry of your credit rating falling. By being, organized, and making sure that you have enough money in your bank to cover those important bills, you will see your credit rating rise, rather than fall.  If you feel that you are slipping into financial trouble, nip it in the bud.

Do not hide away, as this will make the problem worse. But face it head on, take back control of your finances and contact as soon as possible, the company [or companies] involved that you owe money too.  They will appreciate early contact and will be only too willing to help you.