Have you had difficult times because of your bad credit? In a tough economy, most people see their credit score go down. There are, however, ways to better it, so be sure to read these tips to repair it.
If you are buying a home it will not always be easy, and even more difficult if your credit is bad. If this is the case, you can apply for a loan through the Federal Housing Administration (FHA). The credit requirements for these loans are more lenient than those of conventional lenders, and the federal government also guarantees the loans. You may even qualify for an FHA loan if you don’t have enough money for a down payment or the closing costs.
Make sure that you are never using more than 50% of your credit card’s limit. Your credit score can diminish with balances over 50%, so spread out the debt or pay off the credit cards.
Credit Score
By maintaining a good credit score, you can decrease your interest rate. A lower interest rate means lower monthly payments, and less time paying off your debt. Try to get the best offer and credit rates so you can increase your credit score.
Good credit scores mean you can easily qualify for a home or car loan. If you wish to have an even higher credit score, make sure that you pay your house mortgage off on time. Home ownership also means you have assets that you can rely on to increase your credit score. This will also be useful in the event that you end up needing to borrow funds.
Interest Charges
If your debt includes large amounts for interest charges contact the debt collector and see whether you can pay the original debt and avoid some of the additional interest charges. Some companies that charge high interest rates are running the risk of having those rates challenged by consumers. It is important to take into account the fact that you did sign a contract and agreed to pay off the attached interest. You may wish to make a legal claim that the interest rate charged exceeded your state’s statutory limits.
Any company or credit counselor that claims they can erase all negative reports from your credit history should be viewed with some skepticism. It seems unfair, but accurate negative information will stick around for seven years. It is possible, however, to remove errant information.
Credit Counselor
If you are looking into a credit counselor, be sure to find out information about them before you choose to use them. Many counselors are on the up-and-up and are truly helpful. Others just want to take money from you. Some are just people trying to scam you. Consumers should always check to see if a credit counselor is not a scam before deciding to use them.
Do not get mixed up in things that may lead you to imprisonment. There are many different places that claim they can help you get a new credit profile. This is illegal and you’ll get caught. You could go to jail if you have a lot of legal issues.
You should look over all negative reports thoroughly when attempting to fix your credit. Although a certain credit item may not have any error, finding a mistake corresponding to a date or an amount can have the same item taken out of your report.
Credit Card
In order to start repairing your credit, you should close all but one of your credit card accounts. You will want to either transfer your balances onto the one remaining card or set up payment arrangements, but close the account to new charges. By doing this you can make your bills more manageable. Instead of a mailbox full of credit card bills, you will only have one.
If you have felt badly about your poor credit score for a while, use these tips to change your score and change your life. These tips can stop your score from plummeting and help it increase.
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