With bad credit your options are limited, you can’t take out loan, lease a car, or do anything that requires good credit. Paying bills late or not at all can lead to poor credit scores. If you have poor credit and you want to change it, read this article for information that will help you do just that.
Financing a home can be difficult if you have bad credit. FHA loans are good options in these circumstances, because the federal government guarantees them. FHA loans can even work when someone lacks the funds for down payment or closing costs.
The first step in credit score improvement is to build a plan. You have to stay focused and committed if you want to make concrete changes to your financial situation. Just buy what you need, and forget unnecessary purchases. If you are buying something because you want it, and don’t need it, put it back on the shelf.
Credit Card
If you have a poor credit history and can’t qualify for a credit card, get a secured card. Secured credit card applications have a high rate of approval because you must fund a security deposit against your credit limit. If you show a good history of payments with this card, it will help improve your credit standing.
If your credit card has a balance of over 50% of your limit, it should be your number one priority to pay it off until the balance is under 50%. Any time you exceed 50% of your credit limit, your credit rating is affected. Pay off credit cards as fast as you can, or spread the debt out further.
Credit Score
You can get better interest rates on credit cards and loans when you have a good credit score. By doing this your monthly payments will be easier to afford and your bill will be paid off faster. Try to get the best offer and credit rates so you can increase your credit score.
Try to negotiate with your creditors about the amount of interest you’ll pay on an old debt. In many situations, exorbitant fees and penalties can be challenged. On the other hand, you’re likely bound by a contractual agreement to pay any interest charged by lenders. Suing your creditors can be effective in some circumstances in cases where the court considers the interest rates to be excessive.
When trying to repair your credit, research any credit counselors you consider using very thoroughly. While some counselors are legitimate, offering genuinely helpful services, others have ulterior motives. There are a lot of people out there that are trying to take advantage of those who are down on their luck. A wise consumer will find out if the credit counselors they deal with are legitimate or not.
Prior to agreeing to a debt settlement agreement, find out how that process is going to impact your credit score. Some agreements cause less damage to your credit score than others, and each should be considered prior to making an arrangement with a creditor. Many collectors just want to get paid and don’t care about credit consequences.
One excellent way to get your credit score back up is to close all your credit cards except for one. Transferring multiple balances to one single card is a way to gain control of your finances. This can help you avoid paying down smaller balances and focus on paying one card off.
Payment Plan
If a creditor agrees to give you a payment plan, get that payment plan in writing. This will provide proof of your agreement in case any problems ever arise. After you have paid off your debt, send proof of this to the major credit agencies.
High credit card balances can damage your credit. The first step to repairing credit is to pay those balances down. Pay off accounts with the highest interest rates first. Doing so shows your creditors that you are taking your debt problem seriously.
Make sure a credit score improvement agency is legitimate before choosing to work with them. Too many of these services will use your desperation to make money. It is sad to see how many people have been taken advantage of by credit repair scams. You need to research customer feedback so you can determine if a company is trustworthy or not.
Collection Agencies
One of the most stressful things about poor credit is dealing with debt collection agencies. The consumer can use cease and desist orders, but these only stop harassment. These letters stop collection agencies that harassing debtors, but they don’t erase liability for the debt itself.
Credit scores affect your ability to get a loan, whether it be for your aspiring home business or for your child’s college tuition. Even if you are in debt and have a low credit score, you can rectify your situation by remembering these all of these tips.
