You need not suffer the effects of bad credit, no matter how you wound up with credit problems. Whether you have been personally damaged by economic conditions, victimized by dishonest lenders or even were simply too carefree in your spending, you deserve better credit. Luckily, there here are some steps that you can take to turn things around.
Getting home financing is no small feat, especially if your credit score is less than perfect. If this is the case, try to get an FHA loan, which are loans backed by federal government. FHA loans offer lower down payments and help with closing costs.
If you need to repair your credit, the first step is to come up with a workable plan and stick to it. Making changes to become a wise spender means you have to make a budget and rules, then follow them. Only the necessities can be purchased from here on in. Before you open your wallet ask the questions “do I need this?” and “can I afford this?” If the answer is no to either, put it back on the shelf.
Any credit cards that have balances over 50% of your limit should be paid off until they are less than 50% of your limit. If you owe more than half of your credit limit on any credit card, this will have a negative impact on your rating. Plan to pay down that card as soon as possible, or see about transferring some of that debt.
Installment Account
Try opening an installment account. When opening an installment account, you need to make a monthly payment, so get something you can afford. Your FICO score will rise over time, if you responsibly manage this type of account.
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. Sadly, harmful entries remain on your report for roughly seven years. It is possible, however, to remove errant information.
Don’t risk prison. Don’t buy into scams that suggest you create new credit files. Do not attempt this because it’s illegal; you will not be able to avoid getting caught. You could end up owing a great deal of money or even facing jail time.
Check any negative items on your reports carefully when you begin fixing your credit. If you notice a mistake on your report, you could get some items crossed off. Even if the item itself is right, an error in the date or amount gives you the right to contest it.
Joining a credit union can give you opportunities to increase your credit score. They have opportunities that other banks can’t match since they are local, and don’t have to follow some of the same regulations.
Late Payments
You will be able to keep up with your bills, and get a good credit score. Late payments affect your credit report. Also late payments might prevent you from obtaining a loan should you need it in the future.
Make sure that you always read your credit card statement entirely. Go through line by line for accuracy, and to prevent getting charged for an item or service you did not actually get. It is solely your responsibility to be sure that everything is correct.
Credit Score
Only work with legitimate credit restoration companies. There are lots of disreputable credit score repair agencies out there. There are numerous people that have been the victims of credit score improvement scams. Use online reviews and other resources to find an honest agency that can help you.
When lenders examine your personal credit history, they will not consider any statements you have made about the negative marks. It can even draw more attention to the bad spots, so don’t do it.
One of the most stressful aspects of handling bad credit is dealing with debt collection agencies. If a debt collection agency is harassing you, writing a cease and desist letter can stop the harassment. Remember, even when the debt collectors stop annoying you by phone, your obligation to pay what you owe is not alleviated.
Part of a nasty credit crunch is having multiple debts that you do not have the money to pay. Split your available funds and make sure that you make payments on each of your debts. Paying each creditor something, even less than the minimum payment due, can usually appease your creditors enough that they will not turn your accounts over to collection agencies.
It goes without saying that if your credit is poor and needs repairing, you need to start from the bottom and build. Prepaid credit cards can help you to break bad spending and repayment habits. Potential lenders will be sure to see that you can be relied upon and are worthy of credit.
Credit Score
New lines of credit either long-term loans or a new credit card will initially lower your credit score. Avoid obtaining checkout credit cards that offer huge discounts. Your good credit score will suffer a small dip each time you open a new account.
It can be stressful to try and figure out how to improve your credit, but if you keep at it, you can make things better and see the results you want. Apply the advice from this article to start your march toward better credit score days.