Bad credit can add salt to an economic wound. Hard circumstances in life or simple mistakes, can sometimes cause credit to go awry. Looking at your credit can bring back these bad memories, making moving forward difficult to do. There are some excellent ways to repair your credit, a few of which are shared here.
Getting money for a home loan can be difficult, particularly when your credit is less than perfect. Federally guaranteed loans (FHA loans) may be an option. You may even qualify for an FHA loan if you don’t have enough money for a down payment or the closing costs.
Credit Score
If you can’t get a normal card due to low credit score, look into a secured card. You are more likely to be approved for this type of card because, once funded, the banks feels secure that you will pay them back. A responsibly used new credit card will begin healing your credit score.
By keeping your credit score low, you can cut back on your interest rate. This can help lower your monthly payments, and help you pay them off quicker. Receiving competitive credit rates and good offers are important in having credit that you can pay off easily, and that will get you a great credit score.
A respectable credit score makes it much easier for you to purchase a home with a mortgage. If you pay your mortgage as agreed, your credit score will rocket into the stratosphere. Owning a home provides financial stability which is backed by your asset, the home, and as such, results in great credit. This will also be useful in the event that you end up needing to borrow funds.
Opening up an installment account will help you get a better credit score and make it easier for you to live. You need to review the terms of an installment account carefully, because you’ll be required to maintain a certain monthly minimum. If you use these accounts, your score will go up rapidly.
If you want to avoid giving too much to your creditor, simply refuse to pay towards unfairly huge interest rates. In most cases, creditors are somewhat limited in the amount of interest they can charge. You did sign a contract saying that you would pay off the debt. You may wish to make a legal claim that the interest rate charged exceeded your state’s statutory limits.
Take the necessary steps to fix any mistakes that you see on your credit reports by filing an official dispute. Send a dispute letter along with supporting documents to the credit agency that recorded the errors. Include a request for a return receipt with the dispute package so that you can prove it was received by the appropriate agency.
If you are currently spending more than you earn, you need to quit that immediately. This will require a change in your thinking. In the not too distant past, credit was easy and people could stretch themselves too far, but now the economy is paying the price of those days. Review your budget and look at what you can spend each month without using more money than you have coming in.
Make sure to review your credit card statement monthly to make sure there are no errors. If you spot any mistakes, contact the credit company right away to keep them from reporting the mistakes.
If you are able to get a payment plan worked out with any of your creditors, make sure you get the terms in writing. Having the plan in writing will protect you if the creditor reneges on the plan or if your debt is transferred to another creditor. Every time you get a debt paid off, ask the company to notify the credit bureaus.
Try not to file for bankruptcy. Bankruptcies appear on credit reports for ten years. It may seem like the right things to do, but your future will be affected. Once you have filed for bankruptcy, it may become very difficult to secure a loan or open a new credit account.
Carefully read all of your credit statements. Make sure the charges on your credit cards are accurate. You are the only one that can verify if everything on there is the way it should be.
Having bad credit can lead to feelings of hopelessness, and these negative sentiments can pervade your thoughts. If you follow these tips, you will be well on your way to improving your credit.