You can often feel as though you are a victim when you have poor credit. Hard circumstances in life or simple mistakes, can sometimes cause credit to go awry. Looking at your credit can bring back these bad memories, making moving forward difficult to do. Don’t despair, there are ways you can repair your credit.
Getting money for a home loan can be difficult, particularly when your credit is less than perfect. You should consider getting a FHA loan they are backed by the government. Some FHA loans even cover a down payment or your closing costs.
When your credit is so bad that you can’t get a ‘regular’ credit card, a secured one will help you to repair your credit. Most likely, you will not have a problem obtaining this type of card, but you must add funds to the account before you make any purchases to assure the bank that you will pay. Limited spending and regular payments can turn a new credit account into a valuable credit improvement tool.
Don’t do anything illegal. There are less than honest entities that will show you how to make a brand new credit file. Do things like this can get you into big trouble with the law. Think of the legal costs and the possibility of doing hard time.
Contact your creditors to request a reduction in your credit line. This will keep you living within your budget, and will show the credit companies that you repay debts. This will allow you to get credit easier in the future.
When you want to rebuild your credit, take a close look at any negative reports that are harming your credit. While the credit item itself may not be in error, if you can find a mistake in the date, amount, or any other factor, you may be able to have the whole item removed from your report.
Sign up with a credit union if you need to get a new credit line and are having a hard time. You may find that the credit union has more options and better rates to offer you than banks will.
Find and challenge errors on your credit report using the dispute process offered by each credit reporting agency. Draft a dispute letter that will go to each credit rating agency that shows an error, and prepare any supporting documents. Sending your letter by certified mail provides you with proof that the letter was received.
Get a written copy of any payment plan you negotiate with a creditor. This will give you important documentation in case of an ownership change or if the creditor tries to back out of the agreement. If you have finished paying it off, you should request a confirmation so you can send it to the credit reporting agencies.
If you go with a repair company to improve your credit score, be sure it is legitimate. There are a number of agencies out there that are really not that helpful. Some people have been victimized by scams that were supposed to help their credit. One way to separate the wheat from the chaff is to check user reviews online.
Avoid using your credit cards. Purchase with cash. If you have to make a purchase with your card, pay it off right away.
One of the biggest stressors can be bad dealings with debt collection agencies. Cease and desist documents can be used to hold back collection agencies, but only to stop harassment. You will still have to pay what you owe even if collection agencies stop calling you.
Be careful of paying for a service or a lawyer that advertises quick or instant credit repair, many of them are dishonest. A lot of people are having difficulty with their credit, and there are lawyers that try to exploit these people with illegal and ineffective credit score improvement services. Before contacting a lawyer for assistance, do some investigating.
Although it’s easy to feel like you can never recover from bad credit, it is possible to do so. The following tips will help you repair your credit and get you to think more positively about your financial situation.