Bad credit can hurt your life in many ways. Bad credit makes it harder to get any type of loan including for a car or house. Being negligent or delinquent when it comes to bills can hurt your credit scores. The tips listed here can help raise your less-than-desirable credit score.
Getting a traditional home loan can be difficult, if not impossible, with imperfect credit. See about getting an FHA loan, which are loans that the federal government guarantees. FHA loans are a good option regardless of your down payment amount or funds available for closing costs.
If you are unable to get an unsecured credit card due to your low credit rating, consider a secured card to help reestablish your rating. Anyone can get one, but you must load money onto the card as a type of “collateral”. Even though this card will be secured by your own money, you will make payments and manage it as if it were unsecured. This will improve your credit as you show yourself able to make the payments on time.
Credit Score
If you credit score is good, you should have no problem purchasing a house and obtaining a mortgage. One way to help improve your credit is to pay your monthly mortgage payments on time. Owning a home provides financial stability which is backed by your asset, the home, and as such, results in great credit. A good credit score is necessary when you need to take out a loan.
Try opening an installment account. Open an installment account that you can pay for and make sure to keep an affordable monthly minimum on it. You might see a big improvement in your credit score, if you can handle an installment account responsibly.
Getting a reduced interest rate is the easiest way to reduce your overall debt. In many situations, exorbitant fees and penalties can be challenged. However, when you signed up for the line of credit you also agreed to pay the interest. You need to be able to prove the interest rates are too high if you want to sue your lenders.
One thing to watch out for when trying to fix your credit is scammers who say that they can get any negative information deleted from your credit, regardless of its accuracy. Unfortunately, negative marks will stay on your record for seven years. You should know that mistakes and anything incorrect can be removed from your credit report.
You should consider talking to directly with your creditors when you are trying to improve your credit. Maintaining contact shows your good faith and can help you minimize further debt. One way to tackle this problem is to call them and ask if you can have the due date or monthly charge amount changed.
Credit Counselor
Make sure you research a credit counselor before you visit them. You will find some counselors that truly want to help you fix your credit situation, while others may have different motives. There are many scams out there. Consumers should always check to see if a credit counselor is not a scam before deciding to use them.
Be wary of credit restoration scams that can get you in legal trouble. Don’t buy into scams that suggest you create new credit files. These scams are not legal and there will be repercussions. You could end up owing a great deal of money or even facing jail time.
You can contact your creditors and request a lower limit. Not only can this tactic prevent you from getting yourself in over your head with debt, but it can also imply that you are responsible to those companies and to any future companies.
Before you get into an agreement about settling a debt, make sure you understand how it’s going to affect your overall credit. Some debt settlement methods can hurt your credit even more, and you should be sure of how it will affect you. They do not worry about how your credit score looks; they want to get money.
Filing Bankruptcy
If at all possible, avoid filing bankruptcy. The fact that you filed for bankruptcy is noted in your credit report and will stay there for 10 years. While ridding yourself of most debt may seem ideal, it is not without consequences. Filing bankruptcy makes it difficult if not impossible to get anything involving credit, like credit cards and loans, in the future.
Go through all the statements you receive. You will need to read over every charge on your account to check that it is accurate. You are responsible for the accuracy of information on your credit card statments.
Try and pay down any revolving account balances in order to boost your credit score. Just lowering your balances can raise your credit score. The FICO system notates when a balance on a card is at 20,40,60,80, and 100 percent of the total available credit.
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 can even draw more attention to the bad spots, so don’t do it.
A terrible credit situation would be having many different debts you can’t afford to pay back. When you do have money to apply to your debt, spread it among all of the creditors so that each one gets a little. A small part payment is always going to be preferable to those you owe money to than no payments at all. By making regular contributions to your debts, you should be able to keep the collection agencies at bay.
Repairing your credit isn’t something you can do overnight, but the best way to fix it is to slowly raise it back up. Prepaid or secured credit cards can help to rebuild your score without late payments or going over your limit. This will make you appear responsible to future potential lenders.
If you want to send your children to college, or need a simple loan, your credit score matters. If you have a poor credit score, take note of the tips below and start to repair your credit.