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Research: Practical ways to recover from bad credit -

One of the keys to get cheaper debt or credit cards with more attractive terms is to maintain a good credit history at all times. Although maintaining a good credit history is more about constructive habits, credit card customers, might end up with bad credit due to indiscretion and irresponsible spending. However, it is possible to claw your way back into the good books of credit card issuers, by following certain steps, which are practical and beneficial too. Here are some tips to ensure that your credit history starts looking better with every passing day.

Narrow down your debtors

The important thing is to reduce the number of entities you owe money to. Whether it is loans, multiple credit card accounts or any other form of debt, it is advisable to pay them off as quickly as possible. Reducing the clutter goes a long way in helping you streamline the recovery process. It enables you to keep track of your debts and manage them in a smarter way the second time around. It isn’t hard to figure out which credit card debts you need to pay off. Ideally these are cards with greater interest rates and insignificant rewards. Your aim should be to get down to one or two credit cards at the most. This will enable you to track your outstanding debt better as well as remember the repayment dates.

Sort out your payments

Once you pay off the debt, it is a good idea to cut up the card as frauds are very hard to prevent these days. Closing credit card accounts is a good idea only if the credit card doesn’t have a substantial credit history. If you are trying to recover from bad credit history, you need to sort out your due dates, by which you need to pay credit card bills, utility bills and insurance premiums. Missing out on payments will never really benefit your cause and on the contrary, will add to your debt, through late fees and penalties.

Spend less on credit cards

If you are having trouble paying back the debts, an obvious way of avoiding trouble is by spending less on your credit cards. You need to ensure that the credit card bills remain within the limits of spending that you are comfortable with, allowing you to repay the debt on time without any penalties. On the other hand, excessive spending would not only add to the debt but will also add to late fees and interest, worsening the debt further.

Pay extra if you can

You can negotiate with the credit card issuer for a debt repayment plan. As per the new rules, the card issuer should give you a minimum repayment amount which you can pay to get rid of the debt in good time and thereby improve your credit record. However, you can pay extra over the minimum amount, month after month, to not only get rid of the debt faster but to also make your credit history look more consistent and impressive.