Having bad credit can create a feeling that you are victimized by your own personal finances. You may have gone through bad life experiences or made simple mistakes, and a poor credit score can remind you of that bad time, making it hard to move forward. Luckily, there are things you can do today to make your credit better; here are a few great ways to do that.
If your credit is not perfect, getting a mortgage can be tricky. Try to secure an FHA loan; these are federal government guaranteed. If you do not have a down payment or money for closing, consider a FHA loan
If you want to fix your credit, you must first conjure a workable plan that you can stick to. You must be dedicated to making some significant changes in the way you spend your money. Only buy the things that are absolutely necessary. Ask yourself how necessary each purchase is, and how affordable it is too. If you can’t answer “yes” to each of the questions above, you need to reconsider the purchase.
Credit Card
There are secured credit cards available if your credit rating is too low to open up a regular credit card account. Secured credit card applications have a high rate of approval because you must fund a security deposit against your credit limit. Using this card responsibly will improve your credit rating over time, and eventually you’ll be able to get a normal credit card again.
Pay down any credit cards with a balance in excess of 50%, preferably getting them down to 30%. 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.
The higher your credit score, the lower the interest rate that you can obtain will be. By doing this your monthly payments will be easier to afford and your bill will be paid off faster. Paying your outstanding balances on time is the best way to keep your credit in check, and to obtain lower interest rates.
Once you have your credit score higher, you will be able to finance a house. If you wish to have an even higher credit score, make sure that you pay your house mortgage off on time. Owning a home is a great thing to have to help with your credit score. The house secures your finances and adds to your assets. Financial stability is important should you need a loan.
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. In many situations, exorbitant fees and penalties can be challenged. On the other hand, you’re likely bound by a contractual agreement to pay any interest charged by lenders. If you go ahead and sue your creditors, ask that they consider the high rate of interest.
Credit Counselors
Never hire a credit counseling company without doing some research, so as to ensure they are a reputable organization. Some credit counselors offer real help while others have more dubious things in mind. Other options are clearly scams. A wise consumer will find out if the credit counselors they deal with are legitimate or not.
Be wary of credit improvement scams that can get you in legal trouble. There are various online scams that involve creating a fresh credit file. This is illegal and you will eventually be caught. Legal ramifications can cost a lot, and you may go to jail.
Consider joining a credit union. They offer a lot of benefits to their members and it can be easier to obtain a line of credit from them. Credit unions focus more on the local situation instead of the national one, and may provide more options or rates that are more favorable than those of a larger bank.
Bad credit can really get you down in the dumps. If you work on getting your credit repaired, you will feel much better.
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