Nowadays, millions of people have bad credit scores due to a number of things, such as job losses and a higher cost of living. Fortunately, these tips will help you build your credit score.
Financing a home is not always an easy task, especially when you have less than perfect credit. Look into alternative financing options like FHA loans. You may even qualify for an FHA loan if you don’t have enough money for a down payment or the closing costs.
The first step to repairing your ailing credit is to create a manageable, feasible financial plan. However, if you are not prepared to alter bad habits regarding your spending, nothing will ever change. Sticking to necessities for a while is crucial. Ask yourself if a certain purchase is both necessary and affordable. Buy the item if your answer to this question is “yes”.
Credit Card
If you have a poor credit history and can’t qualify for a credit card, get a secured card. 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 use a credit card responsibly, you will go a long way in repairing your credit.
If you have credit cards where the balance is more than half of your credit limit, pay these down right away. When your debt is over 50%, credit ratings usually go down. With that said, try to spread out the debt that you have or try paying it off.
An installment account is a great way to increase your credit score. 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. Keeping an installment account will help your credit score.
Negative-but-correct information cannot be removed from your credit report, so be wary of promises from unscrupulous companies who promise to remove it from the credit reporting agencies. Unfortunately, this negative information stays on your credit record for at least seven years. It is possible, however, to remove errant information.
Call each of your charge card companies and ask them to lower the limit on them. By doing this it will stabilize you in your financial boundaries instead of letting you extend beyond what you really should.
Before you agree to any sort of repayment plan to settle your debts, consider how this will affect your credit score. There are ways to go about this that will have less of an impact and should be learned about before you make any kind of deal with a creditor. Many collectors just want to get paid and don’t care about credit consequences.
File Bankruptcy
Do everything possible to avoid bankruptcy. The fact that you filed for bankruptcy is noted in your credit report and will stay there for 10 years. It can be tempting to just go ahead and file bankruptcy to get out from under the debt, but the detrimental effects can be long lasting. If you choose to file bankruptcy, you’ll be unable to get a credit card or loan in the future.
Paying your credit cards on time keeps you in good standing on your credit report. Paying late is placed on your credit report which can hurt your chances of getting a loan.
When you receive your credit card statement, go over it carefully. Make sure that all of your fees and charges are correct and that there are not any items that were not authorized by you. You are responsible for the accuracy of information on your credit card statments.
Try lowering the balance of any revolving accounts you have. Your credit score can go up if you just bring your balances down. FICO will base your score on what percent of your available balance is in use, so keep that in mind.
Only work with legitimate credit score improvement companies. The industry unfortunately has some agencies that fall short on their credit improvement promises. Far too many people have been bilked by dishonest agencies. Take the time to read reviews of different agencies. This will allow you to find an honest one to work with.
Try not to use your cards at all. Do all of your spending with cash or debit cards. If you do use a credit card, pay the full balance each month.
When attempting to fix your credit score, exercise caution when it comes to attorneys and legal teams that advertise instant repair of 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. Get reviews on a lawyer before you go to them for help.
You shouldn’t have to wait to get going with your credit score repair. Use this information to help increase your credit rating.