Having bad credit can be stressful and annoying. It’s one of the main stumbling blocks to a successful life. Bad credit and keep you from great opportunities as they arise. That said, it is possible to restore your credit to its former glory and prevent it from being wrecked again.
An imperfect credit rating can make financing a home even more difficult than normal. Try to secure an FHA loan; these are federal government guaranteed. FHA loans offer lower down payments and help with closing costs.
Pay down any credit cards with a balance in excess of 50%, preferably getting them down to 30%. If your credit card balances exceed 50% of their limits, it will lower your credit score, so spread your debt over multiple cards, or better, pay down the balances.
It is easy to get a mortgage for a house if your credit score is good. Paying down your mortgage improves your score as well. Owning your own home gives you a significant asset to use in securing your finances, and your credit score will reflect that asset. That way, you will be in a better position to secure loans in the future.
Do not fall for the false claims many have about their ability to fix your credit. The claim that they can remove accurate debts from your credit report is false. You have to wait for seven years before negative data can come off your record. If there is incorrect, negative information, you can get it removed.
When trying to repair your credit, research any credit counselors you consider using very thoroughly. While many counselors are reputable and exist to offer real help, some do have ulterior motives. Some are just people trying to scam you. Knowledgeable purchasers will always make sure that the credit counselor in question is legitimate before hiring.
Do not try something that you do not know is legal or illegal. Don’t buy into scams that suggest you create new credit files. That is illegal and you are going to be caught. You could go to jail if you have a lot of legal issues.
Contact the credit card company and ask to get your card limit lowered. This will help you accomplish three things: 1. You will avoid being overextended. 2. Credit card companies will begin to view you as responsible. 3. It will be easier for you to get credit as time passes.
Read your negative reports carefully when attempting to rebuild your credit. If you notice a mistake on your report, you could get some items crossed off. Even if the item itself is right, an error in the date or amount gives you the right to contest it.
Start living within your means. If you’ve been living outside your means, then get ready for a reality check. Getting credit has never been easier, making it just as easy for people to buy items they simply can’t afford. This, though, comes with a hefty interest price tag. Take a hard look at your financial situation to come up with a realistic spending plan.
Try to pay down all of your debts until you’re only carrying a balance on one. 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. Doing so will allow you to pay off one individual debt rather than a multitude of lesser balances.
If at all possible, avoid filing bankruptcy. The record of the bankruptcy appears on your report and affects your credit rating for up to 10 years. Bankruptcy not only zeros out your debt, it also zeros out your credit score. It may be impossible for you to get a loan or credit card in the future if you file for bankruptcy.
It is important to read all credit card statements you receive. Take a second look to make sure that you are being charged only for what you actually purchased. You are the only person that is responsible for making sure the statements are error free.
Credit card usage should be eliminated. Purchase with cash. If you ever use a credit card, be sure to pay it all in full.
Sometimes you have a large number of outstanding credit bills that need your attention, overwhelming you. You should spread out the money you do have to spend so that all of your creditors get a share. Even if you are only making minimum payments, sending along at least a little money will mollify your creditors and prevent them from contacting collection agencies.
In order to start the process of credit improvement, it is wise to seek new credit as a way to re-establish yourself. A secured credit card, one that is prepaid, will help you improve your credit score. A potential lender will see this as a responsible move on your part, showing that you are credit worthy.
Determine a way that you can settle all overdue accounts using affordable time payments. Although it will appear on credit reports, they will be paid.
If you are having trouble creating or maintaining a budget, discuss your situation with a credit counseling service. Often, these organizations can work with your creditors to work out an appropriate repayment plan and can help you focus on improving your finances over time. Credit counseling can give you the tools you need in order to keep track of your finances and stay out of debt in the future.
Contact your creditors directly to work out alternate payment plans if you are having difficulty making your monthly payments. A creditor will often times work in conjunction with you to find a plan that they do not report to a credit score if you get a hold of them. Additionally, this will take some pressure off and help you pay down balances associated with creditors who won’t work with you.
Simple tips like these will help you fix your credit problems and keep your credit healthy. A high credit rating is essential for most people, so learning about repairing your credit is hardly a waste of time.