Many people fall victim to the consumer driven society we live in and spend more than they could pay off at the interest rates offered by credit card companies. You can reverse the effects of these actions though.
If you are buying a home it will not always be easy, and even more difficult if your credit is bad. Federally guaranteed loans (FHA loans) may be an option. Some FHA loans even cover a down payment or your closing costs.
To start fixing your credit, you will have to pay your bills. Even more important than just paying your bills, is to pay off the entire balance, and pay them on time. After you have paid off some old bills, you will see an immediate improvement in your credit rating.
You should consider talking to directly with your creditors when you are trying to improve your credit. Talking to them will help keep you from drowning further in debt and making your credit worse. Some of your options include negotiating for a later due date, and asking for reductions in your minimum monthly payments.
Credit Counselors
You need to carefully scrutinize credit counselors before you consult them for help with repairing your credit. Although some credit counselors are truthful and legitimately helpful, other credit counselors are not honest and upfront with their motives. Some companies you may find are outright scams. Intelligent customers will make sure to determine the legitimacy of a credit counseling agency before acquiring their services.
Requesting that your credit card limits be lowered can benefit you. This is likely to keep you from overusing credit, which can be a financial burden. It also lets credit card companies know that you are responsible, and this makes them more likely to extend credit to you as time goes on.
If you are currently spending more than you earn, you need to quit that immediately. This might require a re-thinking of your lifestyle. Easy access to credit makes it simple for many people to buy expensive items that they do not have the money for, and a lot of individuals are dealing with the consequences of those purchases. It is important to look closely at your finances and see what you can actually afford and what you can not.
Credit Card
One excellent way to get your credit score back up is to close all your credit cards except for one. Call your credit card company and try to work out a repayment plan, or transfer the balances of multiple cards to one lower interest card. Doing this will allow you to focus on paying off one large credit card bill, instead of several smaller ones.
Any time you establish any payment plan with any creditor, make sure you get it in writing. This is a great way to have documentation of the plan if the creditor changes their mind or the company ownership gets changed. 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.
Do everything you can to avoid filing bankruptcy. It is noted on someone’s credit report for 10 years. This may appear to be a wonderful idea where you rid yourself from all this debt at once, but in actuality it causes more harm than good. It may be impossible for you to get a loan or credit card in the future if you file for bankruptcy.
Timely payments will keep your credit status in good standing. Each time you make your payment late it will go against you.
If you want a higher credit rating, you will need to bring down the balance on any existing accounts. Your credit score can go up if you just bring your balances down. When balances reach anywhere from 20-100% of your available credit balances (in 20% intervals), the FICO system will make a note.
When lenders are looking at your credit, an explanation that goes with the report generally will not even be looked at. The less you can do to attract attention to negative reports, the better.
Collection Agencies
Some of the worst stress you experience with bad credit is caused by debt collection agencies. You have the option of sending a cease and desist letter to agencies to stop them from calling, but that doesn’t mean that your debt vanishes. These letters stop collection agencies that harassing debtors, but they don’t erase liability for the debt itself.
If you want to fix your credit it can seem like a lot to handle, if you work hard you can do it the right way. Put the information you just learned into practice and start repairing your credit today.
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