Your credit can be lowered significantly by errors in your credit report. You can actually fix your credit yourself and finally have a healthy credit report. Here are a few ideas for fixing your credit.
If your credit is not perfect, getting a mortgage can be tricky. There is, however, alternative types of funding available that are offered by the banks. FHA and USDA are two such agencies who offer finance to those with lower credit scores, sometimes with low down payment and closing cost clauses. FHA loans are also great when a borrower doesn’t have the money to make a down payment or pay closing costs.
If you need to repair your credit, the first step is to come up with a workable plan and stick to it. You need to change your past habits and build new, better approaches to credit. Pay cash for things, and cut out unnecessary expenses. Before making any purchase, determine if it is within your means and if it is indispensable. Don’t buy the item unless you answer “yes” to both of these questions.
Pay down any credit cards with a balance in excess of 50%, preferably getting them down to 30%. When your debt is over 50%, credit ratings usually go down. With that said, try to spread out the debt that you have or try paying it off.
Credit Score
If you make a decent income, consider an installment account when you want to give your credit score a boost. Make sure you can afford to make the payments and try to maintain a minimum monthly balance. If you can manage one of these accounts, your credit score should improve quickly.
In order to make sure that you do not overpay, know that you can dispute your really high interest rates. It is important to know the terms of your original agreement for the debt you incurred. Usually if you agreed to the terms the terms will be upheld as legal. If you believe the charges are excessive and your debtor will not negotiate down the interest and other additional charges, state laws might provide you with additional avenues to pursue a reduction in these charges. Federal law provides that when you are billed by a collection company the fees and interest cannot exceed the amount of the original debt. Your initial agreement likely included a commitment to pay interest. If you choose to bring a lawsuit against your creditors, use the high interest rates against them.
In order to start repairing your credit, you need to start paying your bills. You can’t just pay whatever you want whenever you want. You need to pay your entire balance when it’s due. Your FICO score will begin to increase immediately after you pay the bills that are past due.
Make sure you do your research before deciding to go with a particular credit counselor. Some credit counselors offer real help while others have more dubious things in mind. There are many scams out there. Before you conduct any business with a credit counselor, check into their legitimacy.
Learn what affect a debt settlement plan will have on your credit rating before you sign up. You should know all about the methods you can use if you are going to enter into an agreement with someone. They are just out to get their money and do not care how that effects your credit score.
If you notice credit reporting errors, always file a dispute. Write a dispute letter to any agencies with recorded errors, and include supporting documents. Ask for a return receipt so that you can prove that the agency got your package.
Credit Card
A first step in fixing your credit is to close all credit card accounts that are unnecessary. Aim to only have one account. Transfer credit card balances to one card for loan consolidation. In this manner, you can take care of all your credit card debt by paying down a single balance.
Make sure you will get a plan in writing if you decide a payment plan is the best option for you with your creditor. Having documentation is important for your records but also protects you in case a creditor changes their mind. When the debt is eventually paid or settled in full, you should request documentation of this and forward copies to the primary credit reporting companies.
This is one of the quickest way to create and maintain a credible financial record. Every time you pay late it is put on your credit report and will hurt you if you ever need a loan taken out.
Credit Score
As shown here, if you want your credit score to rise, there are quite a few pro-active steps you can take. By following these tips, you will find yourself with a better credit score in no time. With a little time and know-how, great improvements can be made to your credit reports and boost your overall credit standing.
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