It doesn’t matter whether you fell victim to people giving out free credit cards, spent too much money or was hit very hard with the recession. Chances are that your credit has been damaged. Thankfully, there are methods in the below article that can help you mend this problem.
Getting a traditional home loan can be difficult, if not impossible, with imperfect credit. If possible, apply for an FHA loan; these loans are backed by the United States government. If you do not have a down payment or money for closing, consider a FHA loan
If you want to fix your credit, you must first conjure a workable plan that you can stick to. Real changes come from commitment to healthy spending habits. Be sure to buy only the things that you need. Consider if a purchase is both essential and affordable, and only purchase it if you can answer “yes” on both counts.
You will be able to get a lower interest rate if you keep your personal credit score low. This allows you to eliminate debt by making monthly payments more manageable. Make sure to use a company that gives you the best rates so your bill isn’t being built up by money you haven’t even spent.
Opening up an installment account will help you get a better credit score and make it easier for you to live. It is necessary to at least pay the minimum, so insure the account is something that you can pay. If you are able to keep up with one of the accounts, you should see your credit score improving quickly.
Begin paying your bills to repair your credit. You should always make an effort to pay your bills on time and in full. After you have paid off some old bills, you will see an immediate improvement in your credit rating.
Before using a credit counselor, it’s important to research them completely. While some counselors are legitimate, offering genuinely helpful services, others have ulterior motives. Others are outright scams. A savvy consumer will always do his or her research on any credit counseling service to ensure that the agency is legitimate.
Dispute every error you identify on your credit report. You should contact the credit bureaus both online and by certified letter; be sure to include proof of your claims. Use a return receipt when you mail your package so that you can prove that the agency received it.
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. You should plan on how you will pay the remaining open balances, or how to consolidate them into one account. This way you can work on paying one credit card balance off, instead of a bunch of smaller ones.
If you and your creditor decided to set up a payment plan, you should first get the details of the plan in written form. This way you have documentation of the agreement in case the creditor decides to change their mind or ownership of the company changes. Upon completion of payment, make sure to get the receipt in writing and send it to the credit reporting agencies.
Do not file for bankruptcy. This will have damaging consequences to your credit score for ten years. While getting rid of your debts all in one go seems like an excellent idea, your credit will be affected by it for a long time to come. You may never get a line of credit for any purchases you might need to make if you go ahead, give up on repairing your credit and file for bankruptcy.
When you start fixing your credit, pay down balances on the credit cards as soon as you can. Pay down credit cards that have the highest amount owed, or the highest interest rates. This will show creditors that you are responsible with the cards.
Paying your credit cards on time keeps you in good standing on your credit report. Late payments are reported to all credit report companies and will greatly decrease your chances of being eligible for a loan.
Although it can seem daunting, you can get your credit on the mend by learning about it and taking the proper steps. Apply the tips you learned here and get started on your way to good credit.