Debt relief can help you to get out from under your debt in a way that works out well for your situation. It allows you to pay a small amount each month to get the bills taken care of. However, you may be left with a less than stellar credit score afterward. There are many factors that go into figuring your credit score. Consider following the advice in this article to end up with a better credit score after you complete a debt relief program.
Get a secured credit card
The sooner you begin working on your credit after going through the debt relief process, the sooner you can build a good credit score for yourself. Since it will be a while before you are able to get approved for a traditional credit card, you should get yourself a secured one. A secured card is one you secure with your own funds. But, they do report to the credit agencies and they bill you as a regular card does. This allows you to start showing activity on your credit reports so you can begin a history now. It also allows you to start showing a good payment history as long as you pay your bills on time.
Move to unsecured credit cards
Once you have shown to be less risky due to the payment history of your secured cards, those cards may offer to upgrade you to an unsecured credit line. Also, you will begin to get offers from other unsecured cards. Take advantage of one or two unsecured offers, but be careful not to open too many lines of credit or this can negatively affect your score.
Get a store credit card
Once your credit cards begin doing their job of raising your credit score, you may start getting offers for department store cards. Consider accepting one of these offers. Be choosy and make sure you go for the line to a store you enjoy shopping at. Also, consider the interest rate and other terms to choose the best one. Having a credit card or two along with a store credit line will give you well-rounded credit.
Don't apply for a lot of new lines of credit at one time
Before you apply for any new line of credit, make sure there is a good chance of being approved. You want to keep the inquiries on your reports at a minimum. Too many inquiries in a short amount of time can also negatively affect your credit.
When you are choosing the right debt relief program for you, make sure you go with one that's going to offer you monthly payments you know you are going to be able to continue making until you have paid everything off. Also, go with one that's going to work with the companies to get them to accept a settlement amount that's less than the original debt.
For more information, contact a local company like Dennis Lee Burman Attorney at Law.
