Poor credit is a terrible thing for you to deal with as you journey through life. Your financial options will diminish, fewer options will be open to you and you will not be able to take advantage of new credit line offers. Here are a few steps you can take to restore and protect your credit score.
Having poor credit makes financing a home a nightmare. If your income is a factor you may qualify for a FHA loan, which has lower standards and makes the federal government your lender in a sense. Even if the applicant does not have money for closing costs or a down payment, an FHA loan is workable.
The first step in repairing your credit is figuring out a plan that works for you, and sticking with it. You must make a commitment to making changes on how you spend money. Don’t buy anything unless you absolutely need it. Before making any purchase, determine if it is within your means and if it is indispensable. Don’t buy the item unless you answer “yes” to both of these questions.
Interest Rates
You can get better interest rates on credit cards and loans when you have a good credit score. Lower interest rates mean lower payments, which allows you to pay off debt faster. The key to paid off credit is to find a great offer and a competitive rate so that you can pay off your debt and get a better credit score.
Try an installment account to get a better credit score and make some money. Make sure that you are able to afford the payments on any installment accounts that you open. By successfully handling the installment account, you will help to improve your credit rating.
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 bordering on illegal for credit card companies to charge you skyrocketed interest rates. You did sign a contract and agree to pay interest. If you want to sue creditors, you need to state your claim that the interest rates are too high.
When trying to improve bad credit, beware of companies who promise that they can erase any negative, but correct items, on your credit report. It seems unfair, but accurate negative information will stick around for seven years. But, you should remain mindful of the fact that errors can be deleted from your report.
The first step to repairing your credit is paying what you owe. Not only must bills be paid, but they must also be paid in full and in a timely manner. Your FICO score will begin to increase immediately after you pay the bills that are past due.
Credit Counselors
Consumers should carefully research credit counseling agencies before choosing one with which to work. Although some credit counselors are truthful and legitimately helpful, other credit counselors are not honest and upfront with their motives. Some will try to cheat you. Smart consumers make sure that a credit counselor is legit before starting to exchange any money or sensitive information.
Check any negative items on your reports carefully when you begin fixing your credit. You could find mistakes in dates and other factors which can cause the whole item to be removed from the report.
Do not spend beyond your means any longer. You need to change your way of thinking in this regard. Easy access to credit makes it simple for many people to buy expensive items that they do not have the money for, and a lot of individuals are dealing with the consequences of those purchases. Instead of spending more than you can afford, take a long hard look at your income and expenses, and decide what you can really afford to spend.
If you and a creditor agree on a payment plan, make sure the agreement is committed to paper. This will provide proof of your agreement in case any problems ever arise. You also want it in writing if it gets paid off so you can go ahead and send it to credit reporting agencies.
This is one of the quickest way to create and maintain a credible financial record. Every late payment appears on a credit report, and could potentially hurt your chances at a loan.
Credit Score
To increase your credit score lower the amount owed on revolving accounts. By lowering your credit card balances, you will be able to improve your credit score. The FICO system notes when balances are at 100, 80, 60, 40 and 20 percent of your total credit available.
If you go with a repair company to improve your credit score, be sure it is legitimate. Too many of these services will use your desperation to make money. There are numerous people that have been the victims of credit score repair scams. You can separate the scam artists from the good agencies by relying on user reviews found online.
While it can be hard to just let the negative reports go, the statement will not be considered when lenders look at your credit history. Inclusion of the defending statement could actually have the opposite effect as it brings more attention to the fact that you have a negative mark on your report.
Easy advice like the helpful hints in this article can assist you in fixing up your credit issues and score. Having a good credit score is crucial to getting the best interest rates possible and is definitely worth the effort.