If you knew exactly the amount and to whom you owed the money, you might not have been in debt to begin with. But it is never too late to put an emergency strategy into action to help get your credit score on the right track. The following advice can greatly help you rebuild your credit rating.
Fha Loans
For some it may hard to finance their home due to having less than ideal credit. FHA loans might be a good option to consider in these circumstances, as they are backed by our federal government. FHA loans are ideal for those who cannot afford the high down payment that most banks require.
If you have credit that is not high enough for you to obtain a new credit line, sign up for a secured card. Most likely, a secured credit card will be easy for you to get, but you have to fund the credit account before you purchase so the bank knows that you won’t miss any payments. A new credit card, used responsibly, will help repair your credit rating.
If you have credit cards where the balance is more than half of your credit limit, pay these down right away. Once your balance reaches 50%, your rating starts to really dip. At that point, it is ideal to pay off your cards altogether, but if not, try to spread out the debt.
Interest Rates
Having a lower credit score can lower your interest rate. Lower interest rates mean lower payments, which allows you to pay off debt faster. Take advantage of special offers and favorable interest rates to secure manageable credit payments and a good credit rating.
A respectable credit score makes it much easier for you to purchase a home with a mortgage. Paying mortgage notes on time will keep your credit scores high. Home ownership also means you have assets that you can rely on to increase your credit score. Having a home also makes you a safer credit risk when you are applying for loans.
When you’re looking to fix your credit, be cautious of credit score repair companies. They may tell you they can remove negative information, but if it’s correct, it can not be removed. Bad marks on your report will not go away for seven years. It is possible to have erroneous information removed from your report, however.
Before going into debt settlement, find out how it will affect your credit score. Research all of your options, make an informed decision about the method you chose, and only then should you agree to the settlement. Creditors just want their money and really aren’t interested on how it will affect your score.
Joining a credit union is a great way to build your credit if you are having a difficult time doing so elsewhere. Due to their focus on community finances rather than national ones, credit unions may provide better interest rates and more credit services than typical banks.
If you find any errors on your credit reports, dispute them. Contact the credit agency in writing, with documentation to support the errors that you are disputing. Send any correspondence by recorded mail to ensure proof of receipt by the agency.
Do not live beyond your means. You will have to change your thought patterns in order to get your debt under control. Unfortunately, easy credit has lured many people into buying luxuries that they don’t need and cannot afford, which will always catch up with them. Take a realistic look at your financial situation and determine how much you can actually spend.
Though it is hard to make this step, consider paring down the number of credit lines to just one; this will sometimes improve your credit score. Transfer your balances to this one card, with the lowest interest, if this is possible. Instead of paying several smaller credit card bills, you can work to pay off one credit card.
Credit Card
Always examine your monthly credit card bill to make sure everything is accurate. If you notice unwarranted fees or surcharges, contact the credit card company to avoid being reported for failure to pay.
Any time you establish any payment plan with any creditor, make sure you get it in writing. Any plan that you agree on should be put in writing and signed by both parties to protect you in the future. When the debt is eventually paid or settled in full, you should request documentation of this and forward copies to the primary credit reporting companies.
Doing this will ensure that you keep a solid credit score. Every time you pay late it is put on your credit report and will hurt you if you ever need a loan taken out.
It is important to read all credit card statements you receive. You are looking to see that every charge is correct and determining whether or not you are being charged for an item you didn’t buy. You bear the responsibility for looking after your own best interests, and you are the only person who will know if your statement is accurate.
It is obviously somewhat difficult to let derogatory marks stand undefended, but the evidence suggests most lenders don’t use those statements in determining creditworthiness. If anything, it will just hurt you as it will draw attention to the negative event.
Repair your credit by building it up again. Using a prepaid credit card will help to build your credit score, without the worry of late payments, and bad marks on your credit report. Potential lenders will be sure to see that you can be relied upon and are worthy of credit.
As should now be apparent, most of what’s required to get you out of debt in order to salvage your credit is simply common sense. If you follow this information, you can get to the ultimate goal.
