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Credit Education > Debt Management Help > Debt help for credit score improvement

Debt help for credit score improvement

By Janet Lacey
Published: Monday, January 31st, 2011

To improve your credit score, you need to prioritize your credit card account which has the highest interest rate first. Pay off on the debt amount of the account. Although this is difficult to do, when you have enough money to counter the debt on that account, you don’t have to wait for many more months until the high interest rates significantly add up to make you even more helpless.

The benefit of this is that you will have more opportunities to pay for the other accounts with low interest rates because you know you have settled the heaviest debts first. For you to determine priorities, rank your accounts according to their interest rates. With the highest interest rate account on top of the list, you have a ready target. Go down the list and settle debts in the account you are currently targeting and you’ll see that debt payment becomes easier and more manageable. Of course you know that the sooner you settle your debts in a particular account, the sooner will your credit score also improve.

Second, make the effort of not adding more debts. The purpose of the first step is to improve your credit score. That cannot just happen when you pay debts but at the same time still incur them as well. Should there be emergencies, they are out of your control and are the only things for which you are allowed to borrow money. But other than the emergencies, do not cancel out your efforts by paying debts and improving credit scores while at the same time borrowing more money somewhere else.

Third, negotiate your credit card debts with your credit card company. This will serve the purpose of informing you about available options and what might be alternative payment methods recommended by the company itself. If a cardholder asks for interest rate reduction, some companies will be willing to help.

You just have to show that as a cardholder, you are actively doing your responsibility of paying your debts so you wouldn’t have to face more problems with your credit card company. Being aware of the other interest rate offers within the company and asking them to give you such rates instead will help make your payment easier and your credit score better.

Last, you can pay more on secured debts. The secured debts include you car or home or the other important assets securing your loan. Credit cards are not part of the secured debts. Secured debts carry larger amounts and are thus expected to have more time allowance for payment.

It will be more advantageous to make extra payments for your secured debts like your mortgage in the long run. This way, you will be able to remove your loans and spend for other things later on. This will serve for the benefit of your credit score because you can better focus at improving your records, reports, or history in the long run.

Crucial to the success of all these is of course being watchful of expenses and income balances, remember that you are always in control.

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