Good credit management requires that you keep the current status of all your accounts, reduce debt and maintain an appropriate account portfolio. Sometimes you need debt management to do all these things.
Current account status
The most important effect on your credit score is your payment history. Even if you have late payment in the past, it is important that all your credit accounts are currently paid on time.
If you are late and cannot make payments on your own, you should ask a qualified credit advisor how to re-book. This means that you can put these accounts in their current state without making double or triple payments. This is one of the benefits that debt management usually has.
Reducing debt balances
Another major factor affecting your credit score is your debt burden. This can affect you in two ways.
First, your total debt can increase your credit score. High cycle balances may cause your credit score to be lower. Creditors think this is a higher risk factor.
Secondly, the proportion of available credit you use may also be a major factor. According to Fair Isaac Corporation, if your balance exceeds 30 percent of your credit limit, any credit card will cause your credit score to drop.
If your credit card balance is high, you do need to reduce these balances as soon as possible. This can save you money while increasing credit. Sometimes you may realize that you have paid for months or even years, but your balance will not decrease. If you cannot increase your payment, then you should consider meeting with a credit counsellor. They can help you develop debt management plans to reduce debt and increase your credit.
Correct Account Combination
A large number of recurring credit card accounts can also have a negative impact on your score. Split accounts on cars and homes can help improve your credit account portfolio and increase your score. You can use these big ticket items only if you successfully reduce debt, maintain payment records, and increase credit scores.
In order to successfully manage your credit, it may be time to look at the debt management plan. If you have been trying to reduce debt yourself, it will not be easier unless you ask for help. It's ok. Get the help you need to manage your credit and debt.
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Orignal From: Why credit management sometimes requires debt management
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