Bad credit is a very frustrating thing to deal with. It can make you feel like you are in debtors’ prison with no hope of escape. Here are a few easy tips on how you can fix your credit and make sure it stays positive in the future.
Financing a home is not always an easy task, especially when you have less than perfect credit. See about getting an FHA loan, which are loans that the federal government guarantees. You may even qualify for an FHA loan if you don’t have enough money for a down payment or the closing costs.
Credit Cards
Pay down any credit cards with a balance in excess of 50%, preferably getting them down to 30%. When balances are over 50%, your credit rating goes down significantly, so try to either spread out your debt or, ideally, pay off your credit cards.
A respectable credit score makes it much easier for you to purchase a home with a mortgage. You will get a better credit score by paying your mortgage payment on time. Once you own a home, you will have financial stability secured by your assets, thus a good credit score. This is helpful in case you want to borrow money.
If you are looking to repair your credit, then you should not believe a company if they promise they can remove negative information from the report. Specifically if this information is correct. This information can stay on your record for about seven years. It is possible to have erroneous information removed from your report, however.
Start paying your bills in order to repair your credit. However, it’s not enough to just pay your bills; you need to make your payments on time and in full. As soon as you start paying off your bills so that they are not late, your credit score will immediately start going up.
Credit Counseling
Consumers should carefully research credit counseling agencies before choosing one with which to work. While some counselors are legitimate, offering genuinely helpful services, others have ulterior motives. Other counselors are nothing more than scam artists. Intelligent customers will make sure to determine the legitimacy of a credit counseling agency before acquiring their services.
Before you agree to any sort of repayment plan to settle your debts, consider how this will affect your credit score. Some debt settlement methods can hurt your credit even more, and you should be sure of how it will affect you. Some creditors have no concern over how your credit score can be affected by entering into certain agreements. These people just want your money.
Credit Reporting
Find and challenge errors on your credit report using the dispute process offered by each credit reporting agency. Report any errors to the three credit reporting agencies. Be sure to include any documents to support your case. When you mail your dispute package, be sure to make arrangements for confirmation of receipt. In this way, you will have documentation that your information has been received.
Do not spend more than you can afford. This might require a re-thinking of your lifestyle. Unfortunately, credit has been easier to get than ever. Many people are buying things that are unaffordable and end up paying more than they should for any item. Look at your budget, and decide what is realistic for you to spend from month to month.
Look for a credit repair company that has good reviews online and is legitimate. There are a number of shady operators in the credit restoration business that can cost you money and do nothing for you. Unfortunately, there have been quite a few people who have been scammed by these companies. Reading unbiased customer reviews will help you decide what company you want to work with.
Use these and other tips to improve and maintain a credit score. Educating yourself about credit and how it works is an important investment that will pay off in the future.
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