Developing a low credit score is easy to do, but difficult to remedy, leading to financial barriers that are hard to surmount. It can take take away choices and stop you from enjoying wonderful opportunities. Read on for some ways to fix your credit and reclaim your life.
Getting home financing is no small feat, especially if your credit score is less than perfect. If your income is a factor you may qualify for a FHA loan, which has lower standards and makes the federal government your lender in a sense. Some FHA loans even cover a down payment or your closing costs.
The first thing you need to do before beginning to repair your credit is outline th steps required to do so, then follow those steps without deviation. You can’t just make up a plan and not change how you spend your money. Just buy what you need, and forget unnecessary purchases. 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.
Interest Rates
By keeping your credit score low, you can cut back on your interest rate. Lower interest rates make it much easier and quicker to pay off balances. Take advantage of special offers and favorable interest rates to secure manageable credit payments and a good credit rating.
If your credit is good, it’s easy to get a mortgage on a new home. By paying off your mortgage on time, you will even improve your credit score further. Owning a valuable asset like a house will improve your financial stability and make you appear more creditworthy. This will be very helpful if the time comes where you need to take out a loan.
Installment Account
Think about getting an installment account to save money and improve your credit score. When opening an installment account, you need to make a monthly payment, so get something you can afford. If you are able to keep up with one of the accounts, you should see your credit score improving quickly.
You can dispute inflated interest rates if you are being charged more than you should be. In many situations, exorbitant fees and penalties can be challenged. You did sign a contract saying that you would pay off the debt. Your interest rates should be regarded as too high if you plan on suing your creditors.
You need to work with the companies from whom you have credit cards. This will keep you from increasing the amount of debt that you have. You can accomplish this by simply calling and asking them to change payment terms, like your interest rate or your billing date.
Credit Counselors
Make sure you research a credit counselor before you visit them. Although some credit counselors are truthful and legitimately helpful, other credit counselors are not honest and upfront with their motives. Some will try to cheat you. Intelligent customers will make sure to determine the legitimacy of a credit counseling agency before acquiring their services.
Do not do anything that will make you end up in jail. Don’t buy into scams that suggest you create new credit files. Creating a new credit file is very illegal and you can be easily caught. Legal ramifications can cost a lot, and you may go to jail.
If you find any errors on your credit report, you should dispute them. Compose a letter of dispute to every agency that reported errors, and include as much documentation as you can. When you mail your dispute package, be sure to make arrangements for confirmation of receipt. In this way, you will have documentation that your information has been received.
Get a written copy of any payment plan you negotiate with a creditor. This is the only way that you have of protecting yourself. You also want it in writing if it gets paid off so you can go ahead and send it to credit reporting agencies.
Bankruptcy should be a last resort. It is noted on someone’s credit report for 10 years. While getting rid of your debts all in one go seems like an excellent idea, your credit will be affected by it for a long time to come. Once bankruptcy has been filed, it could permanently halt your chances of ever obtaining credit again in the future.
If credit improvement is something you have been considering, the first step would be to pay down your credit card balances. First, work on the accounts with the highest interest rates and the highest balances. This action will show creditors that you are being responsible with credit.
Keep your credit cards in your wallet. Try to make purchases using cash only. If a credit card is used for a purchase, pay the entire balance when the bill arrives.
If a lawyer or law office is offering you a quick fix for your credit, be cautious. Because of the surge of credit issues out there, a lot of unscrupulous lawyers advertise that they can repair your credit for large fees. Make sure any credit score improvement service you consider has a positive standing with the BBB.
Having read these simple tips, the only thing left now is to apply them. Since having a solid credit rating is vital for various transactions, time spent learning how to repair your credit is not wasted.