Bad credit is a particularly troublesome life problem that can haunt you for years. It can leave you with less financial options and worse opportunities. Yet, some simple steps can fix your credit and help you to keep your credit in good standing.
If you don’t have very good credit, financing your home may not be easy. An FHA loan can be helpful in such a case since the federal government backs these loans. FHA loans are also great when a borrower doesn’t have the money to make a down payment or pay closing costs.
If you are unable to get a new card because of your bad credit, try to apply for secured cards. Anyone can get one, but you must load money onto the card as a type of “collateral”. Using this new credit card in a responsible manner will help to build back up your good credit rating.
Make sure that you are never using more than 50% of your credit card’s limit. If you let your balances get too high, your credit rating will drop significantly. You can either spread your debt out by transferring some of the balance to low interest cards, or better yet, pay off as much as you can.
Installment Account
An installment account is a great way to increase your credit score. Choose an installment account you can afford, since you will have to leave a certain amount of money on it at all times. You can quickly improve your score by successfully managing these accounts.
You can dispute inflated interest rates if you are being charged more than you should be. Some companies that charge high interest rates are running the risk of having those rates challenged by consumers. However, you agreed to pay the interests off when you signed the contract. If you plan on suing your creditors, you may be capable of having the interest rates viewed as being too high.
Working closely with the credit card companies can ensure proper credit restoration. Talking to them will help keep you from drowning further in debt and making your credit worse. This can be accomplished by negotiating with them for a change in due date or monthly charges.
Do not involve yourself in illegal activities. Scams abound on the internet that show you how to change your credit file. These scams are not legal and there will be repercussions. Taking these short cuts will end up costing you money and could lead to a stay in jail.
Check any negative items on your reports carefully when you begin fixing your credit. The debt itself may be legitimate, but if you find errors in its metadata (e.g. the date, amount, creditor name), you might be able to get the whole entry deleted.
If you see errors on your credit reports, dispute them with the credit agency. Report any errors to the three credit reporting agencies. Be sure to include any documents to support your case. Use a return receipt when you mail your package so that you can prove that the agency received it.
Paying the balances of your cards as fast as you can will help your credit score. Pay down your cards that have the highest interest and largest balances first. This shows creditors you are responsible about your credit cards.
Statements like these will only be ignored, so it’s not worth the trouble. 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.
Having a lot of debts that you cannot pay is part of having bad credit sometimes. Make sure you pay all your creditors instead of limiting it to just a few. Even a minimal payment can satisfy your creditors and keep your accounts from landing in collections.
The only way to repair credit is to be more responsible with your credit accounts. Prepaid credit cards can be a good way to raise your FICO score, away from the dangers of late fees or charges for exceeding your credit limit. A potential lender will see this as a responsible move on your part, showing that you are credit worthy.
A few easy steps, like the ones here, can help you repair your problems with credit and help you to maintain a healthy credit score. The time you invest educating yourself regarding credit restoration is worth every minute.