What to Do When Your Credit Has Hit Rock Bottom

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Credit is one of the few things that effect us greatly throughout our lives. Credit makes decisions on whether you’re worthy of a house, car, credit card, loan, rental property, even some job positions. Something so small yet so significant is so overlooked when you first turn 18 and many, like myself, wish they would have learned important lessons before getting into debt. If you’re feeling lost, here is what you can do when your credit has hit rock bottom.

Change Financial Behaviors

This is one of the hardest yet simplest ways to start correcting your credit. When you have mountains of debt and choose to ignore it, it will only get worse. When I got divorced my credit took a huge hit. It was hard finding a place to live as a single mother so I took residence at any decent place that would take me when I got my own place. What I learned I couldn’t live the way I was previously, I had to change my financial behaviors.

For me, personally, it was eating out. I am not a fan of cooking and would rather have a personal chef than cook for myself. I was spending hundreds of dollars eating out which had to change. For you, maybe its memberships you pay for monthly but never used. This can be a magazine subscription, gym membership, tv streaming service, etc. Anywhere you can make a temporary cut will help get you back on track.

Get Your FICO Score Up

A FICO score is calculated by the by Fair Isaac Corporation which one of the companies that pioneered the credit scoring system. Almost 90% of financial institutions base their lending decisions on FICO therefore making sure your credit fares well in their proprietary algorithm is a must. They pull from all three credit bureaus as well so you want everything even keel. It may take time to improve your credit but it can be done over time.

Check Your Credit Report

Every year you can opt for a free credit report and review your scores. It is very important when reviewing your report that you pay attention to anything that seems off or not accurate. Millions of Americans are denied loans every year due to an error on their credit report. The sooner you can catch these mistakes the soon it can be corrected. On average it can take four months for the correct to be complete so if you’re looking to purchase a house, etc. you will want to stay on top of it. One easy error you can catch on your credit report is late payment or derogatory marks. A few late payments may not seem like a get deal but in some instances it can stay on your report for seven years.

Everyone has the right to good credit and there are lawful resources to help fix any mistakes you may find. For example, The Fair Credit Reporting Act (FCRA), Fair Credit Billing Act (FCBA), Fair Debt Collections Practices Act (FDCPA), The Servicemembers Civil Relief Act (SCRA), The Truth in Lending Act (TILA), and surprisingly enough, the Health Insurance Portability and Accountability Act (HIPAA) all give you the legal right to dispute inaccurate items on your credit.

Turn to the Professionals When Your Credit Has Hit Rock Bottom

With credit playing such a vital role in our lives, sometimes it is best to hand it over to the professionals. Lexington Law is the oldest name in credit repair. Being as respected as they are, they are also the only player in the credit industry with the technological and legal experience to drive results for consumers. Lexington Law understands the complexity of consumer laws and help us consumers understand our rates and have to use these laws to fix our credit. The best part is, they offer packages based on each client’s needs for as low as $24.95 per month.

Though there are many benefits of using Lexington Law, here are a few to help you better understand what they offer.

• Build a foundations of trust knowing legal professionals are fighting for your rights.
• Real-time app that puts information in your hands at the level you prefer.
• They have long-standing relationships with all three of the credit bureaus so they know how getting errors removed works.
• They are a Consumer Credit Protection Act (CROA) compliant organization which means they are extensively related with auditors.

A good credit score may seem far away at the moment but with the help of professionals, checking your report, and changing some habits, you can be well on your way to a better score.