Need To Repair Your Credit History? Here’s How!

Many people’s credit scores have suffered as a result of the economic downturn. Follow these tips if you need a better credit score.

For some it may hard to finance their home due to having less than ideal credit. An FHA loan can be helpful in such a case since the federal government backs these loans. FHA loans are also great when a borrower doesn’t have the money to make a down payment or pay closing costs.

If you have credit cards where the balance is more than half of your credit limit, pay these down right away. 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.

Interest Rate

By keeping your credit score low, you can cut back on your interest rate. A lower interest rate means lower monthly payments, and less time paying off your debt. Getting better interest rates leads to an easily maintainable good credit score.

If you can afford to pay another monthly bill, an installment account paid on time will increase your credit rating. There is a minimum amount each month that you will have to pay, so be sure not to get in over your head. If you are able to keep up with one of the accounts, you should see your credit score improving quickly.

If you find that you have a credit card and the interest rate has gotten to high, you do have the option to not pay the debt, though there will be consequences. It is important to know the terms of your original agreement for the debt you incurred. Usually if you agreed to the terms the terms will be upheld as legal. If you believe the charges are excessive and your debtor will not negotiate down the interest and other additional charges, state laws might provide you with additional avenues to pursue a reduction in these charges. Federal law provides that when you are billed by a collection company the fees and interest cannot exceed the amount of the original debt. On the other hand, you’re likely bound by a contractual agreement to pay any interest charged by lenders. It is possible that you can sue a creditor and claim that the interest rate charged is unreasonably high.

Before using a credit counselor, it’s important to research them completely. Some credit counselors offer real help while others have more dubious things in mind. 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 score improvement scams that can get you in legal trouble. There are less than honest entities that will show you how to make a brand new credit file. This is illegal and you’ll get caught. Not only can legal fees add up, but you could end up in jail.

Credit Score

Before you get into an agreement about settling a debt, make sure you understand how it’s going to affect your overall credit. Some agreements cause less damage to your credit score than others, and each should be considered prior to making an arrangement with a creditor. They do not worry about how your credit score looks; they want to get money.

When you want to rebuild your credit, take a close look at any negative reports that are harming your credit. Even though the particular credit item may not accurate, finding an error in the amount, date, or something else can cause the entire item to be stricken from your report.

If your credit isn’t so hot, but you need new credit to demonstrate responsibility, then look up your local credit union. They have opportunities that other banks can’t match since they are local, and don’t have to follow some of the same regulations.

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. 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.

Now that you know various ways to repair your credit, why should you wait to use them? Low credit scores can adversely affect the actions you take in life so start now to begin increasing your credit rating.