It can be very difficult to secure a loan or lease a vehicle if poor financial decisions have resulted in a poor credit score. Neglecting to pay bills on time can cause credit scores to plummet. For bad credit, follow the tricks in this article.
A secured credit card might be a good option for the person with a poor credit score. Most people are able to get this type of card, but you will have to load it up with a prepaid amount of money, as a guarantee that you can pay any charges that you make. If you show a good history of payments with this card, it will help improve your credit standing.
You will be able to buy a house and finance it if you maintain a good credit rating. Making mortgage payments in a timely manner helps raise your credit score even more. Having a major asset like a house also looks good to potential creditors. This will be useful in case you need to borrow money.
Interest Rate
If your creditors try to jack up your interest rates, do not pay them. You may be able to challenge an interest rate that is extremely high. However, the contract you signed ensured that you agreed to pay off your interest. It is possible that you can sue a creditor and claim that the interest rate charged is unreasonably high.
Never trust a business or person who offers to clear up your credit for a price. Especially if it is correct information they say they can remove. Unfortunately, this negative information stays on your credit record for at least seven years. Incorrect information may be erased though.
Make sure you do your research before deciding to go with a particular credit counselor. The industry is rife with fraud and people with ulterior motives, so finding a legitimate credit counselor can be challenging. Other options are clearly scams. Knowledgeable purchasers will always make sure that the credit counselor in question is legitimate before hiring.
Don’t get involved in anything that could get you arrested. There are plenty of credit scams that purport to erase your existing credit file and create a new one. Do things like this can get you into big trouble with the law. Penalties can include large fines and possibly even incarceration.
If you’re trying to fix your credit, be sure to check all your negative reports carefully. 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.
If you see errors on your credit reports, dispute them with the credit agency. Send a letter to all agencies involved. Include the errors you noted along with supporting documents that prove that the information on file is erroneous. 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.
Start living within your means. This takes a real mindset change. For a while, the easy availability of credit encouraged people to buy more than they could afford. We now must pay for that. Instead of spending more than you can afford, take a long hard look at your income and expenses, and decide what you can really afford to spend.
Credit Card
Take the time to ensure each month’s credit card bill is correct. Contact the credit card company right away if there are incorrect fees, so that they won’t be on your credit report.
Avoid filing for bankruptcy. Bankruptcy does not drop from your credit report until ten years have passed, so you will deal with the fallout for a significant period of time. Although it sounds like an easy way to get rid of debt, it will affect your life for a significant amount of time. It could be near impossible to receive a credit card or loan if you have filed for bankruptcy.
Credit Card Balances
To fix damaged credit, pay off your credit card balances as fast as you can. First, pay down your credit card balances, starting with the highest interest. Doing so shows your lenders that you are responsible.
Debt collectors are an intimidating and stressful part of dealing with bad credit. Remember that when dealing with harassing collection agencies, consumers have the option to issue a cease and desist letter to stop the harassment. You may be able to stop the deluge of calls from a collection agency, but the debt must still be dealt with.
Part of a nasty credit crunch is having multiple debts that you do not have the money to pay. Try to make sure that you find a little bit of money in your budget for all the creditors you owe payments to. Making the minimum payments will, at least, avoid ending up with collection agencies.
New lines of credit either long-term loans or a new credit card will initially lower your credit score. Don’t be tempted to get a new credit card even if it promises you discounts at stores. Once you open a new credit card, your credit score will become lower.
Credit Score
A bad credit score can seriously affect your life. It can prevent you from buying a new car, sending your child to college or getting the home of your dreams. You can, however, make amends with your credit score and start things on an upbeat track once more.
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