You can feel victimized by bad credit. Your bad credit might remind you of your past, and the poor decisions or circumstances that led you to where you are today. You can repair your credit by following these tips.
Getting home financing is no small feat, especially if your credit score is less than perfect. If possible, apply for an FHA loan; these loans are backed by the United States government. If you do not have a down payment or money for closing, consider a FHA loan
Credit Card
If you are unable to get an unsecured credit card due to your low credit rating, consider a secured card to help reestablish your rating. This card will be more than likely be granted to you, however you must fund the account ahead of your purchases as a sort of “insurance” to the bank that your debts will be paid. If you open a credit card account, keep charges fairly low, and pay it on time, this will go towards improving your credit score.
Pay down the balance on any credit card that is 50% or more of the credit limit. If you owe more than half of your credit limit on any credit card, this will have a negative impact on your rating. Plan to pay down that card as soon as possible, or see about transferring some of that debt.
If your creditors try to jack up your interest rates, do not pay them. In most cases, creditors are somewhat limited in the amount of interest they can charge. It is important to take into account the fact that you did sign a contract and agreed to pay off the attached interest. If you’re going to try taking your creditors to court, make sure you can prove the interest rates they charged were excessively high.
You won’t be able to repair your credit until you are able to pay those bills. You must pay them on time and in full. Your credit rating will quickly rise as you settle up your overdue bills.
Credit Counselors
Make sure you thoroughly research into any credit repair agency or counselor before you do business with them. Although some credit counselors are truthful and legitimately helpful, other credit counselors are not honest and upfront with their motives. Some credit services are nothing more than fly-by-night scams. Smart consumers make sure that a credit counselor is legit before starting to exchange any money or sensitive information.
You can contact your creditors and request a lower limit. Doing this keeps you from overtaxing yourself. It also shows the lending company that you are responsible.
Check any negative items on your reports carefully when you begin fixing your credit. While the credit item itself may not be in error, if you can find a mistake in the date, amount, or any other factor, you may be able to have the whole item removed from your report.
Anything on your credit report that you feel is inaccurate should be disputed. Send a dispute letter along with supporting documents to the credit agency that recorded the errors. Send any correspondence by recorded mail to ensure proof of receipt by the agency.
Credit Card
High credit card balances can damage your credit. The first step to repairing credit is to pay those balances down. Sort your credit cards by balance and interest rate with the highest first. Then determine which credit card is the highest either in balance or interest rate and start to pay it off first. This effort will show the credit card companies that you are trying to pay your bills and be responsible.
When you receive your credit card statement, go over it carefully. You want to double check that all the charges are accurate, and that you are not paying for something you did not purchase. You are the only one that can verify if everything on there is the way it should be.
Credit cards should be avoided. Try to use cash instead for all of your purchases and bills. Pay off any credit card purchases immediately.
Do not assume that a lawyer is being honest when he or she claims that they can fix your credit instantly. There are a lot of scam lawyers out there who will charge you a lot of money for credit score improvement techniques that don’t really do much. Before contacting a lawyer for assistance, do some investigating.
In order to rebuild your credit, take baby steps to start improving your score. If you use a credit card that is prepaid you can build up your credit and not have any bad credit reports. Doing this shows lenders that you can be trusted with credit.
Make a plan so that you can get rid of past due bills plus any collection accounts. These accounts will still appear on the credit report, but will be showed as paid. This shows future creditors that you made good on your debt.
If a company or collector threatens you, take a record of it because it is illegal. You are protected by law, and you need to know that.
If you are having trouble making payments, then you should contact the creditors to work out an alternate plan. If you contact them and are faithful in making your new payments you can often avoid being reported to the credit bureaus for late payments. This can help ease some of the financial strain that you have, which will let you put your focus on the accounts where a different repayment plan isn’t possible.
Credit Score
Since your credit score measures how often you are late on your bills, the best way to raise your credit score is to pay your bills promptly. Setting up a payment reminder will help you remember to send in that payment. There are a number of methods you can use to accomplish this. Set up your online account so that an email is sent to you or have your debtor text you a reminder.
When you do not have good credit, you will not feel so good about your financial status and you might think it could never improve. Take charge of your credit, and find out what you can do to increase your score.
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