When Your Credit Score Becomes A Problem - Credit Cards

Many people have serious problems with credit card debt. When your credit score starts limiting your spending and purchasing power, it's time to take a look at what you can do to improve the situation.

Credit Monitoring

In this technological age, all Americans should be in the habit of monitoring their own credit on a regular basis. You can subscribe to services that will provide regular monitoring for you, notifying you by email if your credit rating changes by a specified number of points. Some credit card companies offer this service to their customers for free.

You are able to obtain a free credit report once per year from each of the three major credit reporting agencies, TransUnion, Experian, and Equifax. You can request these reports in writing, but they are accessible immediately online by providing some simple identity-proving answers to security questions.

Carefully review your credit report. Take note of anything still on the report that should already have been removed. Report any discrepancies to the credit agencies and ask them to correct the information. If you have a dispute with what a creditor is reporting, you have the right to have the issue investigated, provide a statement of explanation to be included with your credit report, and have erroneous information corrected.

Managing Debt

To protect your credit score and your buying power, carefully manage your credit debt. Pay your payments on time every month. This often means planning ahead to account for mail time and payment processing time, so set up a budget that allows for it. Pay more than the minimum payment on your credit cards. Pay off debt (but don't close the cards -- open, available, unused credit actually improves your score) and retrain yourself to have more disciplined purchasing habits.

Shop around for credit cards that offer lower interest rates. A lower interest rate that allows more of your payment each month to go toward paying off the principle balance can be much more valuable in the long run than a card that offers spending points or other incentives. Call your current credit card companies and let them know you are considering other companies who offer lower rates and see if they will match or beat those rates. Take advantage of balance transfer offers that allow you to transfer the debt to a no-interest card, and then budget yourself to pay the full balance during the introductory period.

As a consumer, you can take a more active role in preventing problems with your credit cards, keeping your purchasing power intact.

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