Is your low credit score holding you back? Credit score problems are increasingly common in this bad economy. Use some basic credit restoration tips to bring your score up.
Getting home financing is no small feat, especially if your credit score is less than perfect. See about getting an FHA loan, which are loans that the federal government guarantees. Even when the resources for making down payments or paying closing costs are lacking, FHA loans can help.
Credit Rating
If you are unable to get an unsecured credit card due to your low credit rating, consider a secured card to help reestablish your rating. Most people are able to get this type of card, but you will have to load it up with a prepaid amount of money, as a guarantee that you can pay any charges that you make. Using this new credit card in a responsible manner will help to build back up your good credit rating.
You will be able to get a lower interest rate if you keep your personal credit score low. Lower interest rates make it much easier and quicker to pay off balances. Try to get the best offer and credit rates so you can increase your credit score.
Think about getting an installment account to save money and improve your credit score. You have to keep a monthly minimum on an installment account, so make sure you open an account that you can afford. If you use these accounts, your score will go up rapidly.
Start paying on bills to help your credit. You can’t just pay whatever you want whenever you want. You need to pay your entire balance when it’s due. This will improve your credit score. The score rises as soon as you start making some headway on your overdue bills.
Do not do anything that will make you end up in jail. A common scam involves teaching you how to make a completely new, albeit fraudulent, credit file. It’s illegal to do this and you can get caught easily. Think of the legal costs and the possibility of doing hard time.
Call and request lower limits on your cards from the credit card companies. This helps you from overspending and shows that you want to borrow responsibly and it will help you get credit easier in the future.
Make sure you review all of the negative marks against you on your credit report. Even if a charge held against you is legitimate, any problems with its details, like the date or the amount owed, could make the entire entry invalid and eligible for removal.
If getting a new line of credit is vital to your credit score improvement efforts, look into joining a credit union. Credit unions can often offer better rates and more alternatives than larger banks, because they base their decisions on the local economy instead of the national situation.
If you notice credit reporting errors, always file a dispute. Compose a letter of dispute to every agency that reported errors, and include as much documentation as you can. Also include a request for a return receipt to make sure the agency gets it.
Close all your credit cards except for one as a means of repairing your credit. It is important to make small payments or transfer a balance to the open account. It will be easier for you to make payments on a single credit card account, as opposed to several.
Avoid using those credit cards. Pay for everything with cold, hard cash. If you ever use a credit card, be sure to pay it all in full.
Collection Agencies
Debt collection agencies are the most difficult part in having bad credit. A consumer has the legal option of using cease and desist letters to dissuade collection agencies, but it is vital to keep in mind that C&D letters only stop harassment. You will still have to pay what you owe even if collection agencies stop calling you.
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. Investigate any lawyer thoroughly before contacting them for credit assistance.
If you have been frustrated and felt discouraged about your bad credit score, take these tips and use them to change that. These tips can help stop the free-fall of your credit score and start making your score rise.