Many people’s credit scores have suffered as a result of the economic downturn. These tips can save you from that and improve your credit score.
Financing a home can be difficult if you have bad credit. FHA loans might be a good option to consider in these circumstances, as they are backed by our federal government. Even if an individual does not have money for the down payment to purchase real estate or pay closing costs, FHA loans may still work.
Credit Card
When your credit is so bad that you can’t get a ‘regular’ credit card, a secured one will help you to repair your credit. These types of credit cards often require a good faith deposit to open a new account. If you use a credit card well, your credit rating will begin rising.
An installment account is a great way to increase your credit score. With an installment account there is a monthly minimum you need to keep, so only open an affordable account. Handling an installment account correctly will help you improve your credit score in a short period of time.
Make sure to have as low as possible of a credit line available to you. Not only will this prevent you from owing more, but it will be reflected in your credit score because it shows that you are responsible with your credit.
If you see errors on your credit reports, dispute them with the credit agency. You should contact the credit bureaus both online and by certified letter; be sure to include proof of your claims. Ask for a return receipt so that you can prove that the agency got your package.
Credit Card
Try to pay down all of your debts until you’re only carrying a balance on one. You can make arrangements to pay the balances, or transfer the balances of your closed credit card accounts to your single remaining credit card. Instead of paying several smaller credit card bills, you can work to pay off one credit card.
Check your credit card carefully each month to ensure that there’s no incorrect information. Immediately report any errors to your credit card company to prevent a bad mark on your credit report.
Try not to file for bankruptcy. Bankruptcy can make getting credit almost impossible for many years. It may sound like a good idea at the time to rid yourself of all your debt, but it will affect you later on. Filing for bankruptcy will make it very difficult for you to qualify for credit in the future.
When you start fixing your credit, pay down balances on the credit cards as soon as you can. Pay down the cards with the largest balances and interest rates first. Beginning to pay your credit card balances off will show creditors that you are making a valiant effort and are credit worthy.
This helps you retain a proper credit status. Late payments to credit cards are reported to the major credit agencies and can hurt your chances for securing a new loan.
Carefully read the small print on your statements. Make sure the charges on your credit cards are accurate. You are the only person that is responsible for making sure the statements are error free.
To increase your credit score lower the amount owed on revolving accounts. Maintaining smaller balances can improve your credit rating. When your available credit passes 20, 40, 60, 80 or 100 percent, it gets noticed by the FICO system.
Make sure a credit score improvement agency is legitimate before choosing to work with them. There are far too many of these companies that are quite simply fraudulent. Lots of people have been taken in by credit improvement schemes. Take the time to read reviews of different agencies. This will allow you to find an honest one to work with.
Try to use credit cards only for purchases you can afford to pay off. Instead use cash for all your purchases. Pay off any credit card purchases immediately.
Collection Agencies
Debt collectors are an intimidating and stressful part of dealing with bad credit. You can use a cease and desist letter to stop any harassment from collection agencies. This will stop the calls from collection agencies, but that doesn’t mean consumers can keep ignoring the debt.
Don’t fall prey to law offices that promise you instant credit fixes. Because of the surge of credit issues out there, a lot of unscrupulous lawyers advertise that they can repair your credit for large fees. Before contacting a lawyer for assistance, do some investigating.
Put together a plan to pay off the collection account and past due accounts. Though they will still be reflected on all three credit reports, they will show as paid so the ill effects are less substantial.
Credit Counseling
If you are having problems working out a budget, or adhering to it, contact a credit counseling service and seek help as soon as possible. These agencies can negotiate with your creditors in order to come up with an affordable repayment plan; they can also offer valuable advice which can help you to better manage your finances. Credit counseling can give you the tools you need in order to keep track of your finances and stay out of debt in the future.
Now that you know how to improve your credit score, why wait? Put the ideas in this article into action to improve your credit before it starts hurting you.