Being fully aware of past and current debt can help you control incurring new debt that cannot be managed. Now it is time to figure out how to resolve the problems and create a better future. The following advice is easy to follow and can help you repair your credit score.
Getting a traditional home loan can be difficult, if not impossible, with imperfect credit. If you are in this situation you should look into FHA loans before speaking with a bank. Even if the applicant does not have money for closing costs or a down payment, an FHA loan is workable.
Credit Card
When your credit is so bad that you can’t get a ‘regular’ credit card, a secured one will help you to repair your credit. The account is funded in advance, which provides the lender with a level of insurance against unpaid debts. This is why secured cards are often easier to get. Using this card responsibly will improve your credit rating over time, and eventually you’ll be able to get a normal credit card again.
Opening an installment account can give quite a boost to your credit score. There is a minimum amount each month that you will have to pay, so be sure not to get in over your head. By successfully handling the installment account, you will help to improve your credit rating.
If your creditors try to jack up your interest rates, do not pay them. Some companies that charge high interest rates are running the risk of having those rates challenged by consumers. Although, in reality, you did agree in advance to pay any interest charges incurred. You can consider suing your creditors if the interest rates are outrageously high.
When beginning your credit improvement journey, remain wary of companies pledging to get negative credit report entries deleted, especially if those entries are accurate. This information can stay on your record for about seven years. You can, however, succeed at having incorrect information erased from your credit reports.
Before you agree to enter a debt settlement, learn about what happens to your credit as a result of it. You should know all about the methods you can use if you are going to enter into an agreement with someone. Some creditors have no concern over how your credit score can be affected by entering into certain agreements. These people just want your money.
Officially dispute any errors you find on your credit reports. Contact the credit agency in writing, with documentation to support the errors that you are disputing. Mail your dispute packet with receipt confirmation so you will have proof the agency has received it.
You should look at your credit card bill every month to make sure it is correct. If you notice unwarranted fees or surcharges, contact the credit card company to avoid being reported for failure to pay.
Always get a plan in writing if you are going to do a payment plan that deals with creditors. Having documentation is important for your records but also protects you in case a creditor changes their mind. Once the debt is fully paid, you need to get a statement verifying this from the creditor and send it to each of the major credit bureaus.
It is difficult to just forget about negative reports, but writing a statement is useless. There is also the possibility that it will just draw attention to that negative event instead of it being overlooked.
When repairing your score, be cautious of law offices and lawyers that promise fixes for credit. Due to the huge amount of people with credit problems, lawyers have emerged and offer to repair credit for a huge fee, and most of the “repair” is illegal or useless. Do the research on your lawyer before you call them.
Build your credit back up if your current credit scores are low. Prepaid or secured credit cards can help to rebuild your score without late payments or going over your limit. This will make you appear responsible to future potential lenders.
Credit Score
New lines of credit either long-term loans or a new credit card will initially lower your credit score. Store credit cards can be tempting as they often offer discounts to you if you open one but they should be avoided so as not to clutter your credit report. Your credit score will lose points every time you apply for, or are offered, new credit.
You probably noticed that in order to repair your credit score, you really need to use common sense. You can reach your ultimate goal by choosing to follow the straightforward information from the article above.