Many people fall victim to the consumer driven society we live in and spend more than they could pay off at the interest rates offered by credit card companies. Luckily, there here are some steps that you can take to turn things around.
Getting home financing is no small feat, especially if your credit score is less than perfect. In this situation, it is a good idea to try to obtain an FHA loan, because these loans are guaranteed by the federal government. FHA loans even apply for someone who doesn’t have closing costs or the funds that are needed for down payment.
When you want to fix your credit, you need to start somewhere. Have a realistic plan and stay with it. You need to change your past habits and build new, better approaches to credit. Pay cash for things, and cut out unnecessary expenses. See if each purchase is necessary and affordable and only purchase something if the answers are “yes”.
If your credit card has a balance of over 50% of your limit, it should be your number one priority to pay it off until the balance is under 50%. Carrying a balance of more than half your credit limit negatively impacts your credit score. Either pay this balance down or spread it out over multiple cards.
Credit Score
It’s easy to lower your interest rate by ensuring your credit score is high. By doing this your monthly payments will be easier to afford and your bill will be paid off faster. Getting a good offer and competitive credit rates is the key to credit that can easily be paid off and give you a good credit score.
Good credit scores mean you can easily qualify for a home or car loan. One way to help improve your credit is to pay your monthly mortgage payments on time. Owning your own home also improves your credit score in the form of having large assets to borrow against. That way, you will be in a better position to secure loans in the future.
Try opening an installment account. With an installment account there is a monthly minimum you need to keep, so only open an affordable account. You can quickly improve your score by successfully managing these accounts.
If your creditors try to jack up your interest rates, do not pay them. Creditors who charge exorbitant interest may be just a law suit away from having to wipe the slate clean. Although, in reality, you did agree in advance to pay any interest charges incurred. If you want to sue creditors, you need to state your claim that the interest rates are too high.
Begin paying your bills to repair your credit. Pay these bills on time, and make sure you pay the full amounts owed. You will notice how quickly your credit score increases when you start paying off those overdue bills.
Due Date
An important tip to consider when working to repair your credit is to work closely with your credit card companies. You should contact the company and request a lower interest rate or a due date change if necessary. This can be accomplished by negotiating with them for a change in due date or monthly charges.
Consumers should carefully research credit counseling agencies before choosing one with which to work. Some counselors truly want to help you, while others are untrustworthy and have other motives. There are a lot of people out there that are trying to take advantage of those who are down on their luck. If you’re smart, you’ll make sure the credit counselor is not a phony first.
Do not involve yourself in illegal activities. A common scam involves teaching you how to make a completely new, albeit fraudulent, credit file. Doing this is illegal, and you will be caught. Think of the legal costs and the possibility of doing hard time.
Make sure to have as low as possible of a credit line available to you. Not only will this prevent you from owing more, but it will be reflected in your credit score because it shows that you are responsible with your credit.
Credit Score
Repairing a poor credit score can seem like a daunting task, but improving your score is possible with guidance and knowledge. Utilize the above information to start the journey of improving your credit score.