Get Your Credit Back On Track

After you have completed your debt settlement program, you will be one step closer to living better debt free. At this time, you should begin to re-establish your credit. Although your rating will not improve overnight, consider the following ideas to rebuild your credit.


Some Offers Only Look Good On Paper

Did you ever buy a product that looked wonderful in the store, but once you brought it home it did not perform as well as you would have liked? This idea could also be true of sub-prime credit cards. Upon completion of your debt settlement program, be aware of credit card offers that seem too good to be true. Sub-prime issuers may have lenient approval guidelines, but prey upon individuals with previous credit problems by charging astronomical approval and annual fees. These companies commonly apply these fees to your card. Therefore, you acquire a balance before you make any significant purchases.

Educate Yourself

Knowledge and education never go out of style. Become an educated consumer by understanding your credit card agreement. This may involve reading the tedious fine print, but it is beneficial to know your annual percentage rate, due date, late fees, etc. According to a recent survey conducted by TNS, a market research firm, in partnership with professors from Dartmouth College and Harvard Business School, high levels of debt may be correlated to financial illiteracy. The survey revealed that only 35% of respondents were able to correctly estimate how interest compounds over time and more than half of respondents did not understand how minimum payments are calculated and applied to a principal balance. The American Bankers Association (ABA) has developed a free resource to help consumers make informed choices about credit cards. "Guide to Credit Cards" is available on ABA's Consumer Connection web page at www.aba.com. Make sure that you also check your credit report frequently. You are entitled to receive a free credit report every year. For more information, visit www.annualcreditreport.com.