Stop Deteriorating Credit Score

With the change in economy, towards recession, thousands of people are faced with a diminishing credit score rating.  Companies, in order to survive the depressed economy, have resorted to layoffs, decreased work hours, and elimination of part time workers.  Many are facing the problem of how to maintain their credit position or how to improve credit score ratings.

Losing employment creates a real challenge for you in dealing with your bills.  Of course, if you have savings then this will carry you into the future and delay your credit problems.  But, this is the best time to attack your credit issue to improve credit score.  The following is a few tips to get you started to protect your credit score rating.

Make a list of all of your creditors.  Separate out the credit cards, so you can work on these first.  Arrange them in highest to lowest interest rate.  Before your credit starts to change, you want to see if you can qualify for a new credit card that has a low interest rate.  Usually you will get a lower interest rate if you transfer a balance from a high interest rate card to the new card.  Getting your interest rate reduced can help to improve credit score by preventing you from defaulting on the loan.

It is always best to apply for new credit cards, if you are still employed or if you just recently lost your job.  Having too many credit cards can be detrimental to your credit, if they have a high balance.  Use the new credit cards with a lower interest rate only to move balances from the old credit cards with a high interest rate to them.  You will be able to pay these new credit cards off much quicker and improve credit score.

If you have old credit cards that have high interest, call these companies and negotiate a lower interest rate.  If you lost your income, inform them that you will now have a difficult time making payments on time.  Remind them that you want to maintain a good credit score rating and improve credit score.  Tell them you don't want to default on your loan and need their help.

Not all credit cards companies are friendly.  Some of them will not make concession until you stop making your payments.  This is unfortunate since you may need help now when you ask for it not 6 months later during default.  When you find a company that is hard to work with just keep calling them to discuss your issues, since you need to maintain your credit score rating.

Despite all of your efforts to stop degradation of your credit score, you may not be able to improve credit score.  If you cannot keep up with your payments, you will not only lower your credit score but you will be charged with late payment fee, which will increase your debt. After six months of none payment, you loan balance is normally sold to a collection agency.

Once a collection agency has your account, the will hound you, lie to you, threaten you, and call you many times at home and work.  They will remind you that you want to improve credit score not break it down.  Despite that a credit collection agency has purchased your account balance from a credit card company, they have no legal right to collect your balance. 

A collection company will not send you a letter and even if they do, they cannot sue you in court to get you to pay, since your original payment contract was with the credit card company and not them.  So they have no documents saying you legally promised to pay them for the credit card loan.  Your credit score rating and efforts to improve credit score now have to wait for another time, while you work through the credit collector's efforts to collect money from you.

Losing your job or having reduced income changes your entire prospective on life.  Now you have to work to improve credit score or credit score rating, since these credit scores will determine what you will be able do financial in the future.  If you are unable to pay one credit card, then don't let the collection agency intimidate you into thinking you need to pay this.  The damage has already been done to your credit and it's time to try and prevent default on your other credit card accounts.