Millions of people live with bad credit as a result of negative financial impact from loss of employment, climbing cost of living, and the daily challenges of making ends meet. However, the following article gives you some helpful advice on different steps you can take to clear up your debt and improve your credit rating.
Financing a home is not always an easy task, especially when you have less than perfect credit. If you do have poor credit, try to get a FHA loan because there is a guarantee that it will be given to you. FHA loans are a good option regardless of your down payment amount or funds available for closing costs.
If you have credit cards where the balance is more than half of your credit limit, pay these down right away. If you have a balance that is more than 50 percent, your credit score will drop. If you can, pay the balances on your cards; if not, do your best to pay as much as possible each month.
Interest Rate
It’s easy to lower your interest rate by ensuring your credit score is high. This will help you afford your payments, and get out of debt quickly. Obtaining the best possible interest rate saves you money, and helps you maintain your credit score.
It is easy to get a mortgage for a house if your credit score is good. If you pay your mortgage as agreed, your credit score will rocket into the stratosphere. Owning a home is a great thing to have to help with your credit score. The house secures your finances and adds to your assets. This will be useful in case you need to borrow money.
If you find that you have a credit card and the interest rate has gotten to high, you do have the option to not pay the debt, though there will be consequences. The incredibly high interest rates can get challenged and reduced in some situations. You did however sign a contract that agrees you will pay off all interests as well as the debt. It is possible that you can sue a creditor and claim that the interest rate charged is unreasonably high.
One thing to watch out for when trying to fix your credit is scammers who say that they can get any negative information deleted from your credit, regardless of its accuracy. This information can stay on your record for about seven years. Know, however, that it is possible to delete information that is actually wrong.
One of the first steps of improving your credit score is ensuring that your bills are always paid. Paying your bills on time and for the full amount is important. After you have paid off some old bills, you will see an immediate improvement in your credit rating.
When trying to repair your credit, research any credit counselors you consider using very thoroughly. Some counselors truly want to help you, while others are untrustworthy and have other motives. There are a lot of people out there that are trying to take advantage of those who are down on their luck. Knowledgeable purchasers will always make sure that the credit counselor in question is legitimate before hiring.
You should look over all negative reports thoroughly when attempting to fix your credit. Errors are not infrequent in credit reports. If you can prove the credit bureau is in the wrong, they should correct the reported error or remove it entirely.
Anything on your credit report that you feel is inaccurate should be disputed. Draft a letter to reporting agencies disputing negative entries and also submit any available documentation. Make sure that you ask for a return receipt so that you know your letter makes it to its intended destination.
If you and your creditor decided to set up a payment plan, you should first get the details of the plan in written form. This way you have documentation of the agreement in case the creditor decides to change their mind or ownership of the company changes. Upon completion of payment, make sure to get the receipt in writing and send it to the credit reporting agencies.
Carefully read the small print on your statements. Make sure the charges on your credit cards are accurate. Do not trust the credit card companies to have your back, guarantee you do not pay debt that is not yours yourself.
Look for a trusted credit repair agency to help you. Just like any other field, credit score improvement has plenty of companies that do not provide what they promise. Some people have gotten scammed by these credit agencies. By reading user reviews online, you will be able to separate the good from the bad.
You may want to justify yourself, but the statement has no effect on whether a lender will extend credit to you or not. It is irrelevant. Inclusion of the defending statement could actually have the opposite effect as it brings more attention to the fact that you have a negative mark on your report.
Do not use your credit cards. Instead use cash for all your purchases. Any credit card purchases should be paid in full the same month of purchase. Do not carry a balance on your cards.
Do not trust anyone who promises you miracle results. Since many people have credit issues every day, there are now scam lawyers that promise to repair them. They charge large fees, and most of the time the services they provide are illegal and have no worth. Investigate a lawyer before hiring them to help you in repairing your credit.
When you are involved in a credit crunch, you have many debts but not enough money to pay them. Be sure to give a portion of your spendable income to each of your creditors. This will keep your account in good standing while you are paying down your debt.
Now that you know various ways to repair your credit, why should you wait to use them? Use this information to help increase your credit rating.
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