Are you looking for a way to improve your credit score after you’ve been through some financial hardships? Credit score is incredibly important because it plays a crucial role in decision banks make whether or not they should give you credit. Not only that, but your interest rates depend on it, as well as your insurance premiums. Sometimes, your credit score is important when some companies determine whether or not you should get a job. With all the financial crisis this past year, credit scores of many people are less than ideal, and people are looking for ways to improve them.

Pay down current and past-due debts first

When debts pile up, people easily fall into trap and start paying old debts while postponing payments of their current debts. It seems like a responsible and wise thing to do, but keep in mind that those late payments are already reflected on your credit report and score. It’s important to be in contact with your creditor and that you explain to them what you’re trying to do: you are working hard to become current. Be honest and open and ask your creditor for help because there are a few things they can do to help you. First, they can waive any penalties or extra fees which were charged to the account. Second, they can allow you to make up the delinquent amount over several months, and allow you to stay current on your future payments. Third, they can re-age your account to show payments as current and not delinquent. You should get the new agreement in writing, but be sure that you fully comply with the new payment terms.

Hire professionals to clean your credit history

You can get your own free credit report through each of the three credit bureaus and these will contain all the mistakes that you’ve mad which lead to bad credit. Long credit history means that your credit reports will probably be several pages long, and that you’ll have to spend quite some time reviewing it, especially if you’re doing it for the first time. For those who find this job too stressful or simply cannot take time to do it, there are companies that can do that for you: take your negative credit listings, go through them, and have them permanently removed from your credit file. If you’re struggling to get qualified for finance once again, don’t hesitate to ask for professional help.

Stop using credit cards

The easiest to use so most of us use it even without thinking, credit cards are the most expensive of all debt types. Not only are they expensive, but they are the source of aggressive collection efforts. Now before you give up on them it is important to pay off whatever you owe. In this case opting for debt consolidation loans is a great choice. You can pay them off with the help of a low interest, fixed rate, personal loan. If you want to make a difference on your bank account and save some money, try keeping zero or low balances on your credit cards. You can start by making and irregular purchases by using cash and leaving your credit cards at home, safely locked up. There is no need to cancel your credit cards; instead you can start using them less. Still, if you decide that there are credit cards which simply must be cancelled, the ones with the shortest history are the best choice.

Good credit is important in a bank because it will help us make better deals and get credit when we need it. Still, if you’ve lost your income and struggle with too much debt, or some other financial emergencies, there is no need to file for bankruptcy just yet. People who file for bankruptcy find it hard to recover for years, but when you know how to repair your credit you will have a good alternative and live a more peaceful life.