Choosing to file bankruptcy is a big step, and you may find that it’s a step you don’t have to take. The legal team at Morgan & Morgan is here to stand by you and offer guidance throughout whichever route you choose on your journey to financial health. Some people find that they are able to climb out of a financial crisis with just a bit of timely guidance on basic financial management. If this describes your situation, we’ve got a few tips for you on how to improve your credit score:
Pay All Your Bills on Time
This is the single most important thing you can do to protect your credit score. Late payments that go into delinquent status or get sent to a collection agency are the biggest source of credit damage, and probably the easiest to prevent.
If you have a credit card with an upper limit of $3,000, for example, it’s best if you never let your balance go above about $1,000 on that card. Strangely, even if you pay the card down to zero at the end of each month, running a very high balance in the middle of the month can damage your credit. One way to avoid this trap is to make several payments in the course of a month, so that you’re always keeping that balance low.
Keep Good Paid-off Accounts on Your Record
Perhaps you completely paid off a car loan by making on-time payments, and now you want to erase that closed account. Too often people contact credit reporting agencies in a mistaken effort to “clean up” their past history, when actually the evidence of making regular payments in the past is pure gold for your current credit record.
Shop for Loans in a Short Time Period
Are you in the market for a new car or home? Every time you apply for credit, it causes a slight dip in your credit score that will last for a year. FICO, the largest credit scoring agency, will give you a “shopping period” that starts with your first inquiry about a loan and lasts for 30 days. If you make your decision, check out lenders and apply for a loan all within 30 days, your credit score will only get that small down-tick once.
Pay Down Debt Rather Than Moving it Around
Transferring debt from one card to another is not the best strategy, because it doesn’t actually reduce your indebtedness at all. Furthermore, if you close the old paid-off credit card you will be reducing the amount of credit that’s available to you, and thus will cause damage to your credit score.
Good money management habits are important, but many of the clients who come to the Athens lawyers at Morgan & Morgan are in need of more powerful help. Contact us today at (706) 381-8780 for a consultation, and we’ll be happy to examine your situation and see if you can benefit from our expert bankruptcy services.