Bad credit affects every financial transaction you make. You have doubtless experienced the downside of a low credit score. A lot of credit scores are going down during this difficult economic time. Fortunately, there are many things you can do to help improve your credit again, and your first step is as easy as reading this article.
If you don’t have very good credit, financing your home may not be easy. There is, however, alternative types of funding available that are offered by the banks. FHA and USDA are two such agencies who offer finance to those with lower credit scores, sometimes with low down payment and closing cost clauses. You may even qualify for an FHA loan if you don’t have enough money for a down payment or the closing costs.
Secured Credit Card
A secured credit card might be a good option for the person with a poor credit score. Most likely, a secured credit card will be easy for you to get, but you have to fund the credit account before you purchase so the bank knows that you won’t miss any payments. A new credit card, used responsibly, will help repair your credit rating.
Look at the credit card accounts you have with a balance over 50% of the credit limit. Pay those off until they fall under this number. When your debt is over 50%, credit ratings usually go down. With that said, try to spread out the debt that you have or try paying it off.
If your credit is good, it’s easy to get a mortgage on a new home. Paying mortgage notes on time will keep your credit scores high. Owning a home provides financial stability which is backed by your asset, the home, and as such, results in great credit. This will make taking out future loans much easier.
Try an installment account to get a better credit score and make some money. There is a minimum amount each month that you will have to pay, so be sure not to get in over your head. You can improve your credit rating quicker using this type of account.
To avoid paying too much, you can refuse to pay off huge interest rates. You may be able to challenge an interest rate that is extremely high. Although, in reality, you did agree in advance to pay any interest charges incurred. Be very wary of suing your creditors, especially if all of your issues were covered in the contract.
Credit Card
Stay in touch with credit card companies if you wish to repair your score. If you do this you’ll find that your debt doesn’t increase and your credit is improved. Contact your credit card company and request to change your scheduled due date or interest rate.
In order to get a hold on your credit, focus on closing all accounts except one. You should plan on how you will pay the remaining open balances, or how to consolidate them into one account. By doing this you can make your bills more manageable. Instead of a mailbox full of credit card bills, you will only have one.
Pay the balances on all credit cards as soon as you can to start the credit score improvement process. You should first work on paying down the credit cards with the highest balance or interest rates. Creditors will see this action as a sign that you are responsible and educated.
Take the time to carefully go over your monthly credit card statement. Go through line by line for accuracy, and to prevent getting charged for an item or service you did not actually get. You are the only one that can verify if everything on there is the way it should be.
If a poor credit rating has left you feeling discouraged, turn your situation around by applying the guidelines you have just read. These strategies can aid in stopping your credit score from going down and you will be able to make it go up again.
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