Millions of people live with bad credit as a result of negative financial impact from loss of employment, climbing cost of living, and the daily challenges of making ends meet. These tips can help you gain insight on how you can get a better credit score.
An imperfect credit rating can make financing a home even more difficult than normal. An FHA loan can be helpful in such a case since the federal government backs these loans. FHA loans can even work when someone lacks the funds for down payment or closing costs.
If you have credit cards with a balance that exceeds 50% of your credit limit, you must continue to pay on them until the balance is lower than 50% of the credit limit. When balances are over 50%, your credit rating goes down significantly, so try to either spread out your debt or, ideally, pay off your credit cards.
Credit Score
With a good credit score, you can easily buy a house and mortgage it. Making your mortgage payment on time each month will also boost your credit score. Owning your own home gives you a significant asset to use in securing your finances, and your credit score will reflect that asset. This will make taking out future loans much easier.
When beginning your credit score repair journey, remain wary of companies pledging to get negative credit report entries deleted, especially if those entries are accurate. Negative entries on your record stick around for a term of seven years at a minimum, even if you take care of the debts involved. You can erase information that is incorrect from your credit record.
Before you hire a credit counselor, make sure that you have done your research. Many counselors are honest and helpful, but others may be less interested in actually helping you. Some are simply fraudulent and are out to get your money. Wise consumers always verify that credit counselors are legitimate before dealing with them.
Take a look at credit card bills to make sure that every item is one you have charged. If such fees are present, you need to get in touch with the credit card company right away to avoid adverse action.
It is important to get any payment plan that you agreed to with a creditor in writing. This will give you important documentation in case of an ownership change or if the creditor tries to back out of the agreement. If you manage to pay off your debt, make sure you receive proper documentation as proof to send to credit reporting agencies.
If at all possible, avoid filing bankruptcy. Bankruptcy will be noted on the credit report for 10 years, afterwards you must rebuild from scratch. While ridding yourself of most debt may seem ideal, it is not without consequences. Filing for bankruptcy will make it very difficult for you to qualify for credit in the future.
Carefully read all of your credit statements. Ensure that all of the listed charges are purchases that you made, keeping an eye out for fraudulent charges. Do not trust the credit card companies to have your back, guarantee you do not pay debt that is not yours yourself.
To increase your credit score lower the amount owed on revolving accounts. You can improve your score by lowering your balances. When balances reach anywhere from 20-100% of your available credit balances (in 20% intervals), the FICO system will make a note.
When attempting to fix your credit score, exercise caution when it comes to attorneys and legal teams that advertise instant repair of credit. Due to the large number of people experiencing credit difficulties, predatory lawyers have sprung up who charge big fees for credit score repair services that are either useless or illegal. Before you give a lawyer any money or any personal information, make sure to do a thorough check on them and their practice to make sure they are legitimate.
Threats are illegal. If a collection agency is treating you roughly, you could sue them. Even if you are in debt, you still have rights.
Now you know how to repair your credit score, so get started on a plan of action. Act now to start on the road to improving your life by improving your credit.
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