A poor credit score can put you in a bad position. Your bad credit score may remind you of a bad point in your life. There are some excellent ways to repair your credit, a few of which are shared here.
If you have a poor credit rating, it can be extremely difficult to obtain a mortgage loan for a home. 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 can even work when someone lacks the funds for down payment or closing costs.
Credit Card
If your credit history has put you in the position where you are not able to obtain a regular credit card, you should try to get a secured credit card to begin rebuilding your credit. Most people are able to get this type of card, but you will have to load it up with a prepaid amount of money, as a guarantee that you can pay any charges that you make. A responsibly used new credit card will begin healing your credit score.
Start by paying off credit cards with accounts 50% over your limit. You can concentrate on another card once these accounts are lowered to under half of your limit. Your credit score can diminish with balances over 50%, so spread out the debt or pay off the credit cards.
Try opening an installment account. Make sure you can afford to make the payments and try to maintain a minimum monthly balance. If these accounts are properly managed, they can provide a quick boost to your credit score.
Credit Report
When beginning your credit repair journey, remain wary of companies pledging to get negative credit report entries deleted, especially if those entries are accurate. All information remains on your credit report for a period of seven years or more. It is possible, however, to remove errant information.
Contact your creditors to request a reduction in your credit line. Doing this keeps you from overtaxing yourself. It also shows the lending company that you are responsible.
Don’t sign a debt settlement contract until you know what impact it is going to have on your credit score. Some settlement agreements can actually be bad for your credit score, so be wary and do your homework. Remember creditors want their money. They really don’t care about your credit scores. That is up to you to protect.
Dispute any errors that are on your credit report so they are removed. Send a letter to all agencies involved. Include the errors you noted along with supporting documents that prove that the information on file is erroneous. Use a return receipt when you mail your package so that you can prove that the agency received it.
Try to pay down all of your debts until you’re only carrying a balance on one. Transfer credit card balances to one card for loan consolidation. This allows you to pay off one credit card bill rather than many smaller ones.
It is important to carefully review your monthly credit card statement. Whenever you see any, it will be necessary to discuss the situation with your creditor so that they do not submit negative information to the credit agencies.
Payment Plan
If a creditor agrees to give you a payment plan, get that payment plan in writing. This way you have documentation of the agreement in case the creditor decides to change their mind or ownership of the company changes. Once it is paid off, you should get that in writing to send to the credit reporting agencies.
Avoid bankruptcy at all costs. It is noted on someone’s credit report for 10 years. It may sound like a good idea at the time to rid yourself of all your debt, but it will affect you later on. If you choose to file bankruptcy, you’ll be unable to get a credit card or loan in the future.
When you receive a credit card statement you should immediately look at the statement. Always check to make sure that you are being charged correctly, and not being double charged or charged for items that you did not buy. It’s up to you to make sure that every item on your bill is correct and dispute those that are not.
Having a poor credit score can make you have negative feelings about your finances. Following these credit improvement tips can inspire you to think differently and to take charge of improving your credit.
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