Bad credit is an unfortunate detour on the road of life. It can take take away choices and stop you from enjoying wonderful opportunities. But, you can fix your credit in a few simple steps and protect it for the future.
If you have a poor credit rating, it can be extremely difficult to obtain a mortgage loan for a home. If this is the case, you can apply for a loan through the Federal Housing Administration (FHA). The credit requirements for these loans are more lenient than those of conventional lenders, and the federal government also guarantees the loans. You may even qualify for an FHA loan if you don’t have enough money for a down payment or the closing costs.
When attempting to make your credit right once more, it is imperative that you present a solution to all those that you owe money to, and don’t deviate from anything you commit to once it is in place. You must make a commitment to making changes on how you spend money. Only buy the things that are absolutely necessary. Ask yourself whether every purchase is both affordable and necessary, and only buy if the answer to both questions is “yes”.
Secured Credit Card
If your credit history has put you in the position where you are not able to obtain a regular credit card, you should try to get a secured credit card to begin rebuilding your credit. Secured credit card applications have a high rate of approval because you must fund a security deposit against your credit limit. Responsible use of a credit card can help rebuild your credit.
Having a lower credit score can lower your interest rate. Lower interest rates will reduce the amount of your monthly payment, and can also make it easier to repay your debt faster. Getting a good offer and competitive credit rates is the key to credit that can easily be paid off and give you a good credit score.
You will be able to buy a house and finance it if you maintain a good credit rating. Paying down your mortgage improves your score as well. Owning a home gives you secure financial assets. Financial stability is important should you need a loan.
If you want to boost your credit score and earn a decent living, open an installment account. You are required to meet a monthly minimum, so be sure that you can make the payments. If you use these accounts, your score will go up rapidly.
You should examine any negative entries on your credit report thoroughly if you want to fix your credit problems. 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.
Take the time to ensure each month’s credit card bill is correct. If there are mistakes, call the company. If the errors are not fixed, they could get reported to the major credit rating agencies.
If you are able to negotiate a repayment plan with your creditor, be sure to get it in writing. This is the only way that you have of protecting yourself. If you manage to pay off your debt, make sure you receive proper documentation as proof to send to credit reporting agencies.
If at all possible, avoid filing bankruptcy. Bankruptcy can make getting credit almost impossible for many years. This may appear to be a wonderful idea where you rid yourself from all this debt at once, but in actuality it causes more harm than good. Bankruptcy destroys your ability to get any sort of loan for at least a few years, so don’t file unless you have to.
You may want to argue against the reports, but potential lenders will not take your statements into consideration. It can even draw more attention to the bad spots, so don’t do it.
Keep your credit cards in your wallet. Use cash for purchases instead while you are building back your credit. Pay off any credit card purchases immediately.
Create a plan in order to pay back your debts. These things will still appear on a credit report, but they will be marked paid, which is better for your credit.
If a company or collector threatens you, take a record of it because it is illegal. You are protected by law, and you need to know that.
Talk to creditors to try using alternate payment plans directly if you cannot make monthly payments. If you make the first move and hash out a payment plan sometimes they won’t even report it to credit agencies. This can also make your financial situation easier by letting you pay more on those accounts where you have not been able to set up an alternate plan.
Following these simple tips can help you get on the road to repairing your credit and keeping it healthy. Having a solid credit score can impact many important purchases that you make, so taking time from your busy schedule to read up on this subject is always a good idea.
