Is your credit terrible? The information and advice found here can set you straight and on the road to the credit report you wish you had.
If you are buying a home it will not always be easy, and even more difficult if your credit is bad. 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 a good option regardless of your down payment amount or funds available for closing costs.
Planning is the first step to repairing your credit. However, if you are not prepared to alter bad habits regarding your spending, nothing will ever change. Limit your purchases only to things that are absolutely necessary. If the thing you’re looking at is not both necessary and within your budget, then put it back on the shelf and walk away.
Credit Card
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. This card will be more than likely be granted to you, however you must fund the account ahead of your purchases as a sort of “insurance” to the bank that your debts will be paid. A new credit card, used responsibly, will help repair your credit rating.
Make sure that you are never using more than 50% of your credit card’s limit. When balances are over 50%, your credit rating goes down significantly, so try to either spread out your debt or, ideally, pay off your credit cards.
If you credit score is good, you should have no problem purchasing a house and obtaining a mortgage. One way to help improve your credit is to pay your monthly mortgage payments on time. Owning a home shows financial stability, which is great for your credit. Having a good credit score is important if you need to take out a loan.
Installment Account
An installment account is a great way to increase 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. You can quickly improve your score by successfully managing these accounts.
Make sure you thoroughly research into any credit score improvement agency or counselor before you do business with them. Some counselors truly want to help you, while others are untrustworthy and have other motives. You’ll find that other ones are just scams. To help protect yourself from fraud, investigate any credit counselors. One way to check an agency out is to check with the Better Business Bureau.
When looking over your credit report, look closely at the negative report that are listed. There may very likely be errors or mistakes that can be removed.
Find and challenge errors on your credit report using the dispute process offered by each credit reporting agency. You should contact the credit bureaus both online and by certified letter; be sure to include proof of your claims. 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.
Close all your credit cards except for one as a means of repairing your credit. You will want to either transfer your balances onto the one remaining card or set up payment arrangements, but close the account to new charges. This allows you to pay off one credit card bill rather than many smaller ones.
To keep your credit in good standing and get a better score, maintain a low balance on revolving accounts. You can improve your score by lowering your balances. The FICO system will make a note when the balances are at 20, 40, 60, 80 and 100 percent of the total credit available.
If you want to repair your credit, take the time to find a reputable repair agency. There are a lot of credit repair agencies that you will want to avoid. Sadly, many people have fallen for credit restoration scams. Check online reviews about the company, the Better Business Bureau, and even the State Attorney General’s office to find out what their reputation is before signing anything or giving them any money or account numbers.
Collection Agencies
Debt collection agencies can be the most stressful part of a bad credit crisis. Make sure you know that cease and desists of any type can only stop you from being harassed, you’re still going to be in debt. While such letters stop collection agencies from calling, the consumer is still obligated to pay the debts being disputed.
Don’t fall prey to law offices that promise you instant credit fixes. Due to the large number of people experiencing credit difficulties, predatory lawyers have sprung up who charge big fees for credit score repair services that are either useless or illegal. Do your homework and check out any attorney before you hire one to help with credit score repair.
Opening additional lines of credit will negatively affect your credit score. It may be tempting to get a new account when there are bonuses offered at the check out, but you should stop and think about it first. If you fall for the temptation, your credit score will drop when opening that new card.
Now you know your credit report does not have to be a nightmare for you. Start on your way to better credit with confidence. If you do the tips listed here, you will surely get a good credit report that lots of people dream of.