Whether you fell prey to the guys handing out credit cards like candy on campus, got carried away on one too many shopping sprees or got hit hard by the recent economic downturn, you probably did some damage to your credit. You can turn things positive on your credit report by starting with these steps.
If you have a poor credit rating, it can be extremely difficult to obtain a mortgage loan for a home. In this situation, it is a good idea to try to obtain an FHA loan, because these loans are guaranteed by the federal government. It might be possible to get an FHA loan even if you don’t have the money for a down payment or the closing costs involved.
If you want to fix your credit, you must first conjure a workable plan that you can stick to. Be totally committed to changing your spending habits. Don’t buy the things that aren’t needs. Before you open your wallet ask the questions “do I need this?” and “can I afford this?” If the answer is no to either, put it back on the shelf.
Credit Card
When your credit is so bad that you can’t get a ‘regular’ credit card, a secured one will help you to repair your credit. 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. If you open a credit card account, keep charges fairly low, and pay it on time, this will go towards improving your credit score.
When looking to improve your credit, avoid companies claiming that they can remove negative information if the debt is true. You have to wait for seven years before negative data can come off your record. You can erase information that is incorrect from your credit record.
One of the first steps of improving your credit score is ensuring that your bills are always paid. More precisely, you must begin paying your bills fully and on time. You will immediately see changes in your credit score when you begin to pay off your debts, especially those that are active.
Many credit card companies are willing to help customers by eliminated late fees or lowering monthly payment amounts. This will help you stabilize your situation and start working towards a better financial situation. Call them and see if you can change the payment terms. They may be willing to change the actual payment or move the due date.
Contact your creditors and see if you can get them to lower your overall credit limit. It will keep you from overextending yourself financially, it sends a great signal to the credit card companies that you are a responsible borrower, and you will have an easier time getting credit in the future.
Before you agree to settle your debt, you need to know how your credit will stand afterwards. Some debt settlement methods can hurt your credit even more, and you should be sure of how it will affect you. Creditors just want their money and really aren’t interested on how it will affect your score.
Stop spending more money than you have available. This might be a tough thing to get your head around. In past years, people used good credit ratings to buy the items that they normally couldn’t afford, and they are now currently paying big payments. Take a realistic look at your financial situation and determine how much you can actually spend.
Too many credit cards is a common cause of financial strain, so close all of your accounts aside from one. You should arrange to make payments or make a balance transfer to your open account. It will be easier for you to make payments on a single credit card account, as opposed to several.
If you are able to negotiate a repayment plan with your creditor, be sure to get it in writing. You need to have a contract in writing so if the creditor goes belly up or they change your terms, you can catch them on it. Once the debt is fully paid, you need to get a statement verifying this from the creditor and send it to each of the major credit bureaus.
Fixing your damaged credit may seem like an overwhelming task in the beginning, but with a bit of work and a bit of guidance, you can turn things around and get your credit back on track. Apply the knowledge from this article in order to assist you in repairing your credit score.