Errors in your credit history report can significantly affect your credit rating which, in turn, can make it difficult for you to acquire new credit. You can actually fix your credit yourself and finally have a healthy credit report. Keep reading to learn how to repair your credit.
Having poor credit makes financing a home a nightmare. If possible, apply for an FHA loan; these loans are backed by the United States government. Some FHA loans even cover a down payment or your closing costs.
Installment Account
If you can afford to pay another monthly bill, an installment account paid on time will increase your credit rating. You are required to meet a monthly minimum, so be sure that you can make the payments. Keeping an installment account will help your credit score.
Paying your bills is something you need to do to repair your credit. You must pay them on time and in full. Your credit rating will quickly rise as you settle up your overdue bills.
You need to work with the companies from whom you have credit cards. This prevents you from sinking further into debt or further damaging your credit score. Contact your credit card company and request to change your scheduled due date or interest rate.
If you wish to repair your credit, you’ll have to stop spending more than you earn. You will need to change the way you think about spending money. 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. Examine your finances and make wise decisions about how much you should be spending.
If you are able to get a payment plan worked out with any of your creditors, make sure you get the terms 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. Once you make the final payment, get a statement that verifies that the debt has been satisfied and send it to the various credit reporting agencies.
Credit Score
Bankruptcy should only be viewed as a last resort option. This will have damaging consequences to your credit score for ten years. Bankruptcy not only zeros out your debt, it also zeros out your credit score. Once bankruptcy has been filed, it could permanently halt your chances of ever obtaining credit again in the future.
Make sure to fully read every single credit card statement that you get. Take a second look to make sure that you are being charged only for what you actually purchased. If an error occurs, you should immediately notify your creditor.
To keep your credit in good standing and get a better score, maintain a low balance on revolving accounts. Reducing the amount of debt you’re carrying is one of the best ways to improve your credit score. When balances are and increments of twenty percent of your total available balance on that account, the FICO system will take note.
It is obviously somewhat difficult to let derogatory marks stand undefended, but the evidence suggests most lenders don’t use those statements in determining creditworthiness. It is possible that this can be detrimental by drawing closer scrutiny to your report.
Try to avoid using credit cards. Use cash when you need to buy something. If you must use your credit card, pay it back in full.
Collection Agencies
One of the most stressful things about poor credit is dealing with debt collection agencies. Cease and desist documents can be used to hold back collection agencies, but only to stop harassment. A letter like this may stop a collection agency from harassing you, but you are still on the hook to pay your debts.
Unfortunately, sometimes you have more debts than you have money to pay them off. Take out a little money for each one of the creditors that you owe. Even if all you’re making is minimum payments, this will keep you out of collections.
A good way to repair your credit is to begin to build it back up. Utilizing prepaid credit cards allows you to improve your credit score with no concerns about late payments or negative information ruining your credit report. This approach will indicate to others that you are serious about taking responsibility for your financial future.
Opening additional lines of credit will negatively affect your credit score. Opening new lines of credit can hurt your score greatly, even if you get approved. As soon as you open a new credit account, your credit score drops immediately.
Credit Score
As shown here, you can do a number of things to help repair your credit and get back on solid footing again. By following the suggestions contained in this article, an improvement in your credit score should not be too far away. A better credit score is within your reach.