If you had kept a record of who you owed money to then perhaps your debt could have been avoided. Now you must handle the crisis and fix your credit score. The tips in this article will help you repair a low credit score.
Financing a home can be difficult if you have bad credit. If you do have poor credit, try to get a FHA loan because there is a guarantee that it will be given to you. FHA loans are great for the individuals that do not have the financial capability to make down payments.
Secured 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 likely, a secured credit card will be easy for you to get, but you have to fund the credit account before you purchase so the bank knows that you won’t miss any payments. Using this new credit card in a responsible manner will help to build back up your good credit rating.
If you have credit cards with balances that are greater than fifty percent of the maximum, you should pay those down as quickly as possible. It’s best to keep all of your credit cards below the fifty percent mark! If your credit card balances exceed 50% of their limits, it will lower your credit score, so spread your debt over multiple cards, or better, pay down the balances.
Paying your bills is something you need to do to repair your credit. Paying your bills on time and for the full amount is important. You will notice how quickly your credit score increases when you start paying off those overdue bills.
If you are looking into a credit counselor, be sure to find out information about them before you choose to use them. Although some can be quite legitimate, others have motives that are less than kind. Some will try to cheat you. A savvy consumer will always do his or her research on any credit counseling service to ensure that the agency is legitimate.
Do not do anything that will make you end up in jail. There are various online scams that involve creating a fresh credit file. This is illegal and you will eventually be caught. Taking these short cuts will end up costing you money and could lead to a stay in jail.
Debt Settlement
Find out how the process will affect your credit rating before you agree to any debt settlement agreements. You should know all about the methods you can use if you are going to enter into an agreement with someone. Some debt settlement companies are only after profits and do not communicate the likely consequences of their methods.
If you are currently spending more than you earn, you need to quit that immediately. You will have to change the way you think in order to do this correctly. In years past, many people relied on credit cards to make major purchases, but now those risky financial choices are catching up with them. Spend some significant time studying your finances, and set a realistic budget to which you can stick.
Get a written copy of any payment plan you negotiate with a creditor. This is for your protection. It allows you to have valid documentation of the terms in the event that a creditor reneges on its offer or changes owners. Finally, when it is paid in full, get documentation thereof to submit to credit agencies.
Do not file for bankruptcy. Bankruptcy will be noted on the credit report for 10 years, afterwards you must rebuild from scratch. Bankruptcy not only zeros out your debt, it also zeros out your credit score. It may be impossible for you to get a loan or credit card in the future if you file for bankruptcy.
It is easy to get out of debt if you are patient and have common sense. Use the simple information from this article and you should have no trouble fixing your credit score.
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