It can be stressful to have to deal with a negative credit score. It is much more frustrating when you’re reminded of bad decisions you made in the past. It is not easy to rebuild credit, but it is quite possible. Keep reading for helpful hints.
If your credit is not perfect, getting a mortgage can be tricky. If possible, apply for an FHA loan; these loans are backed by the United States government. You might be able to get an FHA loan even if you cannot afford closing costs or down payments.
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 open a credit card account, keep charges fairly low, and pay it on time, this will go towards improving your credit score.
If you have credit cards with a balance that exceeds 50% of your credit limit, you must continue to pay on them until the balance is lower than 50% of the credit limit. Any balances that are over half your limit drag your credit rating down. So be sure to pay your credit card down or, if you can not, try to use another credit card.
You can reduce your interest rate by maintaining a high credit score. A lower interest rate means lower monthly payments, and less time paying off your debt. The key to paid off credit is to find a great offer and a competitive rate so that you can pay off your debt and get a better credit score.
When you have a good credit rating, you will be able to easily get a mortgage loan. Timely mortgage payments augment your credit score. Owning a valuable asset like a house will improve your financial stability and make you appear more creditworthy. Having a home also makes you a safer credit risk when you are applying for loans.
Interest Rates
Excessive interest rates can be contested. However, it is best not to sign contracts containing them in the first place. It is bordering on illegal for credit card companies to charge you skyrocketed interest rates. Your initial agreement likely included a commitment to pay interest. The only way you are legally able to sue the creditors is if you are able to prove that your interest rates are much too high.
A good tip is to work with the credit card company when you are in the process of repairing your credit. If you do this you will not go into debt more and make your situation worse than it was. Don’t be afraid to ask for alterations in interest rates or dates of payment.
Don’t attempt to fix your credit in a way that will result in you breaking any laws. A common scam involves teaching you how to make a completely new, albeit fraudulent, credit file. Creating a new credit file is very illegal and you can be easily caught. In addition to the possibility of facing jail time, you could be fined, your attorney bills may be substantial, and your reputation could be ruined.
Give your credit card company a call and ask them to lower your credit limit. This will stop you from racking up giant credit card bills, and show lenders you are responsible.
Credit Agency
If you see errors on your credit reports, dispute them with the credit agency. Draft a letter to reporting agencies disputing negative entries and also submit any available documentation. Make sure that you send the letter via recorded delivery, so that you can prove that the credit agency receives it.
If you use the tips contained in the above article, you can turn that dreadful 350 into a nice, shiny 850. The main key is to commit to your plan of action and not allow your liabilities slip by. Start working at rebuilding your credit!
This is a limited-time offer. We are not able to guarantee availability if you wait!
