Having a repossession on your credit record can considerably harm your financial profile. Dealing with a repossession can be daunting and considerably impact your financial well-being. Moreover, repossession can raise financial instability and cause more stress.
In this guide, we will take your through the different methods of credit repair after repossession in Florida. But before you follow these steps keep in mind that fixing credit can be time-consuming and requires consistent efforts.
- Review Credit Reports
- Catch Up on Due Collections and Payments
- Cut Down Your Credit Utilization Rate
- Consider a New Credit Account
Following an involuntary repossession, check your credit report to learn about the extent of the damage. This helps in ensuring that the information on the credit report is accurate. You can secure your free credit report from the primary credit reporting bureaus and dispute errors that will help improve your credit score.
Even though you cannot remove legitimate late payment record from your credit report, catching up on your due accounts can prevent further damage. Consider getting in touch with your lenders to come up with a suitable payment plan.
Moreover, in case you have any debt in collections, newer credit scoring plans disregard paid collections. Hence, paying them off will help in increasing your score. When you are caught up, make it a priority to keep paying your bills on time moving forward.
To remove a repossession on your credit report, reduce your credit utilization rate. Your utilization rate is calculated by dividing the balance on your credit card by its credit limit. It is a key factor in calculating the FICO Score. Even though some credit experts might ask you to keep the rate below 30%, there isn’t a magic limit for a good credit score. Keeping your utilization rate low is always more advantageous.
Since your credit utilization rate is recalculated each time a credit card company reports a brand-new balance, especially every month, paying down the debts on your credit card is a great way to obtain quick results.
If you are aiming for credit score improvement after foreclosure and you don’t have another credit account to add positive details to your credit, apply for a secured credit card. A few hybrid debit-credit cards do not require credit check. They can also do not charge interest.
Since many bad-credit loans charge higher interest fees and rates, it is essential to avoid taking unnecessary debt that can strain your budget and disregard your efforts to rebuild your credit.
You can also seek the help of a credit repair service for credit score improvement in Florida. Take advantage of the free credit consultation they provide. However, you should keep in mind that there is no universal set timeframe to rebuild your credit score after repossession. As you are working to fix your credit score, keep a track on the progress.
