The most annoying thing you may experience in life is having bad credit, because it leads to hardships. It can limit your financial choices and keep you from taking part in good opportunities. You can, however, fix your credit problems and have a brighter future.
Getting home finance can be quite tough when your credit rating is not good. If you are in this situation you should look into FHA loans before speaking with a bank. FHA loans are ideal for those who cannot afford the high down payment that most banks require.
You may be able to get a secured credit card even if your poor credit has prevented you from getting other credit cards. 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. A responsibly used new credit card will begin healing your credit score.
Installment Account
Opening an installment account is one way to improve your credit score. All installment accounts must stay above the set monthly minimum, so only open one if you can afford it. You will improve your credit score by properly managing an installment account.
Repairing your credit is actually pretty simple. The first step is to focus on paying your late bills. You must pay them on time and in full. This will improve your credit score. The score rises as soon as you start making some headway on your overdue bills.
You can contact your creditors and request a lower limit. Doing this keeps you from overtaxing yourself. It also shows the lending company that you are responsible.
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. 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 your credit isn’t so hot, but you need new credit to demonstrate responsibility, then look up your local credit union. These credit unions can probably give you better credit options in the long run.
If you find any errors on your credit report, you should dispute them. Create a dispute letter for agencies that have the error, and submit additional supporting documents along with it. Always send your dispute letters certified mail, so that you can get return confirmation. This will give you proof that the agency received your dispute paperwork.
If you work out a payment plan with a creditor, you should make sure to get the plan in writing. Having the plan in writing will protect you if the creditor reneges on the plan or if your debt is transferred to another creditor. Upon completion of payment, make sure to get the receipt in writing and send it to the credit reporting agencies.
Pay your bill early or on time each month to ensure that your credit score stays good. Each late payment that you make shows on your personal credit report and can hurt you when the time comes to take out a loan.
Look for a credit restoration company that has good reviews online and is legitimate. As with most industries nowadays, there are a number of shady companies offering credit score repair. Some people have gotten scammed by these credit agencies. Check online reviews about the company, the Better Business Bureau, and even the State Attorney General’s office to find out what their reputation is before signing anything or giving them any money or account numbers.
While it can be hard to just let the negative reports go, the statement will not be considered when lenders look at your credit history. It can even draw more attention to the bad spots, so don’t do it.
Collection Agencies
Debt collection agencies can be the most stressful part of a bad credit crisis. Cease and desist instructions can be used to ward off debt collectors to a point, but only really to prevent harassment. Even when the phone calls from collection agencies have stopped, the associated debts must still be paid.
It can be terrible to deal with having multiple different debts that you are unable to pay. Divide your money between your creditors so every one gets paid. Even if you can only meet the minimum payment, you will avoid having the bill sent to collections.
These tips will help you on your way. You can repair your credit issues and enjoy a brighter, more financially sound future. Time learning how to repair your credit, means a great future with many transactions since you will have a good score.