Having poor credit can be a serious hindrance to moving forward with your life. You may find yourself boxed with fewer choices when it comes to financial freedom. That said, it is possible to restore your credit to its former glory and prevent it from being wrecked again.
Having poor credit makes financing a home a nightmare. If possible, apply for an FHA loan; these loans are backed by the United States government. Even if an individual does not have money for the down payment to purchase real estate or pay closing costs, FHA loans may still work.
Fixing credit reports must begin with a solid working plan that you are capable of adhering to. However, if you are not prepared to alter bad habits regarding your spending, nothing will ever change. Be sure to buy only the things that you need. See if each purchase is necessary and affordable and only purchase something if the answers are “yes”.
Secured Credit Card
If you need a credit card to aid in fixing your credit but you cannot obtain one due to the state of your credit, applying for a secured credit card is an option. 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. If you utilize a credit card responsibly, it can aid in the repair of your credit rating.
If you want to boost your credit score and earn a decent living, open an installment account. An installment account requires that you make a minimum payment each month. It is imperative that you only take an installment account that is affordable. Handling an installment account correctly will help you improve your credit score in a short period of time.
You can dispute inflated interest rates if you are being charged more than you should be. There are legal limits set in place to control the amount of interest a creditor is allowed to charge you, plus your original debt is all the credit card company paid when you made the purchase. Keep in mind that you did sign a contract agreeing that interest rates were acceptable. The only way you are legally able to sue the creditors is if you are able to prove that your interest rates are much too high.
Do not do anything that will make you end up in jail. Scams abound on the internet that show you how to change your credit file. Creating a new credit file is very illegal and you can be easily caught. They may seem like a small matter, but if you get caught, you could receive heavy fines and even jail time.
Credit Score
Before you agree on an agreement for settling your debt settlement, you should determine what affect this will have on your credit score. There are methods that are going to be less damaging than another, and all should be researched before you enter an agreement with a creditor. They do not worry about how your credit score looks; they want to get money.
If you find any errors on your credit reports, dispute them. Compose a letter of dispute to every agency that reported errors, and include as much documentation as you can. Mail the materials and ask the postal service for proof of delivery in order to build a record to show that the agency did indeed get the letter.
If you are having problems retaining control of your charge habits, close all old accounts except for one. Make necessary arrangements to set up payments, or transfer the balance to your remaining account. You will be able to pay one bill instead of a plethora of small ones.
Filing for bankruptcy is a bad idea. Bankruptcy can make getting credit almost impossible for many 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. If you do file for bankruptcy, it will be extremely difficult to get approved for a loan or a credit card for many years, if ever.
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 score improvement is worth every minute.