Knowing what you owed and to whom it was owed may have prevented you from incurring the debt in the first place. Now that you are seriously in debt, you need to work extra hard to repair your poor credit. Follow this easy advice to get your credit back on track.
An imperfect credit rating can make financing a home even more difficult than normal. See about getting an FHA loan, which are loans that the federal government guarantees. Some FHA loans even cover a down payment or your closing costs.
If you have credit cards with balances that are greater than fifty percent of the maximum, you should pay those down as quickly as possible. It’s best to keep all of your credit cards below the fifty percent mark! You should keep your balances under fifty percent; anything over this and you can lower your credit rating, so spread out the money you own and pay down your credit cards.
Having a good record allow you to qualify for things like a home mortgage. If you pay your mortgage as agreed, your credit score will rocket into the stratosphere. When you are a home owner you will be financially stable based on what you own. This will be very helpful if the time comes where you need to take out a loan.
Installment Account
To earn a sufficient wage and boost your credit, try opening an installment account. Make sure you can afford to make the payments and try to maintain a minimum monthly balance. Handling an installment account correctly will help you improve your credit score in a short period of time.
If you do not want to pay too much, contact your creditors and tell them you will not pay on a interest rate that is astronomical. There are laws that protect you from creditors that charge exorbitant interest rates. Your initial agreement likely included a commitment to pay interest. If you go ahead and sue your creditors, ask that they consider the high rate of interest.
Credit Counselor
Always do research before contracting a credit counselor. Many counselors are on the up-and-up and are truly helpful. Others just want to take money from you. Some will try to cheat you. Be a wise consumer by checking whether or not the credit counselor you are going to deal with is legitimate.
Good credit isn’t worth much if you are in lockup. There are various online scams that involve creating a fresh credit file. Do things like this can get you into big trouble with the law. Legal ramifications can cost a lot, and you may go to jail.
If you come across a mistake on your credit report, don’t hesitate to dispute it. Create a dispute letter for agencies that have the error, and submit additional supporting documents along with it. Include a request for a return receipt with the dispute package so that you can prove it was received by the appropriate agency.
Make sure you will get a plan in writing if you decide a payment plan is the best option for you with your creditor. You want documentation to back yourself up so there will be no problems in the future, and if the company owner changes you will have more of a chance of keeping your plan. Once it is paid off, you should get that in writing to send to the credit reporting agencies.
Credit Card Balances
If credit score improvement is something you have been considering, the first step would be to pay down your credit card balances. First, pay down your credit card balances, starting with the highest interest. This action will show creditors that you are being responsible with credit.
You should keep a low balance on your credit cards to improve your credit rating. Maintaining smaller balances can improve your credit rating. The FICO system will make a note when the balances are at 20, 40, 60, 80 and 100 percent of the total credit available.
Lenders are not likely to include the statement in their decision process. There is also the possibility that it will just draw attention to that negative event instead of it being overlooked.
When you are having trouble paying your bills, debt collection agencies will start contacting you demanding payment. Consumers can try to use a cease and desist letter if an agency is harassing them, but their usefulness is limited. These letters may prevent collection agencies from making phone calls, but the consumer remains responsible for paying the debt.
If you are having trouble making monthly payments, contact your creditors to see if you can work out a payment option. If you make the first move and hash out a payment plan sometimes they won’t even report it to credit agencies. This can help you feel less stressed about an account that is not very flexible.
You should have noticed that the preceding tips have a common theme–they are mostly based on common sense. However, if you implement the advice you have just been given, you can attain your goal of having a respectable credit rating once again.