Handling bad credit history is not everyone`s forte. On the other hand, no situation is too tough to mend. Bad credit history doesn`t do well for people. It is hard to get good credit cards with low interest rates. Invariably the better card issuers reject the customers` applications. Banks do not lend loans to customers with bad credit history and even if they do it would be at exorbitant interest rates that prove hard to repay. Insurance, house loan and even employment depend heavily on the credit history. In short, there is too much at stake as far as a person`s credit history is concerned and hence it has to be mended. Here are some things that could help mend the credit history, although the road back is a difficult one.
Consolidate the debt
If you have several credit cards with a lot of debt, transfer all the debts to one card that has the lowest interest rate. If you could get a balance transfer offer with low APR for the first 9 - 12 months it is a great bonus. Moreover, transferring all your debts to one card will help you track your outstanding balances better, and help lower the interest rate. In the long run, your mind will be uncluttered by the hazy picture about your debt. Don`t close the old accounts, as the history is still important, as you don`t want to hurt your credit score in any way. Inactivity fee is not charged these days, but it is still worthwhile to check if there is any such fee on any of your cards.
Don't charge your cards till you pay out the balance
To get things back on track, you might want to avoid charging on the card for a few weeks. This is because for everything you charge, you are effectively paying more because of the interest you will incur month after month. Your primary aim would be to reduce the credit card debt. The lower your outstanding balance and the greater the consistency of payments, the better it is for your credit history.
Exceed the minimum payment
It is a good idea to work out the minimum payment required, month after month, to pay off the credit card balances, if you have huge amounts due. It is good to pay a bit more than the minimum payment. Not only will this help to pay off the outstanding balance, it will also help to improve the credit history.
Don`t miss bill payment deadlines
It is a bad idea to miss bill payment deadlines for credit cards, internet, phone or anything else as it reflects poorly on your creditworthiness. This is just as true when you have a bad credit history as it is when you have a good credit rating. Paying the bills consistently works amazingly for your credit history.