If you had kept a record of who you owed money to then perhaps your debt could have been avoided. But it is never too late to put an emergency strategy into action to help get your credit score on the right track. The following information is quick, simple and can help repair your credit if followed correctly.
Financing a home is not always an easy task, especially when you have less than perfect credit. If you are in this situation you should look into FHA loans before speaking with a bank. You may even be able to secure your down payment and closing costs through an FHA loan. It depends on if you qualify.
If you need a credit card to aid in fixing your credit but you cannot obtain one due to the state of your credit, applying for a secured credit card is an option. You will most likely be approved for this type of card, but you will have to add money to the card before you can use it so the bank will know that you can pay for all of your purchases. Using this new credit card in a responsible manner will help to build back up your good credit rating.
If your credit card has a balance of over 50% of your limit, it should be your number one priority to pay it off until the balance is under 50%. When your debt is over 50%, credit ratings usually go down. With that said, try to spread out the debt that you have or try paying it off.
In order to make sure that you do not overpay, know that you can dispute your really high interest rates. In most cases, creditors are somewhat limited in the amount of interest they can charge. You did sign a contract and agree to pay interest. It is possible that you can sue a creditor and claim that the interest rate charged is unreasonably high.
Work closely with all of your creditors if you are aiming towards repairing your credit. This prevents you from sinking further into debt or further damaging your credit score. Some of your options include negotiating for a later due date, and asking for reductions in your minimum monthly payments.
Before consulting a credit counseling agency, be sure to check out their background and history. While some counselors are legitimate, offering genuinely helpful services, others have ulterior motives. Some companies you may find are outright scams. If you’re smart, you’ll make sure the credit counselor is not a phony first.
Credit Reports
Make sure to check all three of your credit reports, and pay extra attention to the negative reports when you are working on repairing bad credit. Errors are not infrequent in credit reports. If you can prove the credit bureau is in the wrong, they should correct the reported error or remove it entirely.
If you have bad credit, have your credit cards merged into one single account. You may be able to transfer balances to your remaining account. Instead of paying several smaller credit card bills, you can work to pay off one credit card.
Payment Plan
If a creditor agrees to give you a payment plan, get that payment plan in writing. If the creditor tries to change the agreement or if it the company is sold to someone else, you will have documentation to support your case. Once you finish making all your payments, be sure to send that information to the credit agencies in writing.
Bankruptcy should be filed only if absolutely necessary. It is noted on someone’s credit report for 10 years. While ridding yourself of most debt may seem ideal, it is not without consequences. By filing for bankruptcy, you might have a lot of trouble getting a credit card or qualifying for a loan in the future.
When lenders examine your personal credit history, they will not consider any statements you have made about the negative marks. Trying to defend bad credit may actually draw their attention to the area and cause more problems than it would have originally.
It’s especially painful to have a lot of different debts that you can’t pay all at once. Try to divide all your available money between your creditors, so you can pay everyone at least something. Even making the monthly minimum payment will keep the creditors at bay, and stop them from hiring a collection agency.
Credit Score
Each time you get a new credit card can negatively effect your credit score. Opening new lines of credit can hurt your score greatly, even if you get approved. As soon as you open your new credit card, your credit score will drop.
If you have a hard time making your regular monthly payments, talk to your creditors. If you contact the creditors, sometimes they will offer you a repayment plan which isn’t reported to the credit bureaus. This can also help to relieve some of the financial strain that you have been facing.
Debt consolidation may be an effective way to better your credit if you’re struggling with repairing it. If you bring all your debt into one payment, it will be easier for you to budget the payments into your financial schedule. This helps you make payments on time and get your credit score up.
If you want to get your credit score looking good, it takes quite a bit of common sense. Following these simple steps and credit repair will no longer be a distant dream.
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