When struggling with your credit, it can seem like finding what you need to fix it is impossible. Here are some tips to rebuild your credit. Apply these tips for efficient strategies.
Having poor credit makes financing a home a nightmare. If possible, apply for an FHA loan; these loans are backed by the United States government. You may even qualify for an FHA loan if you don’t have enough money for a down payment or the closing costs.
Secured credit cards are an effective way for you to start rebuilding your credit. Most likely, you will not have a problem obtaining this type of card, but you must add funds to the account before you make any purchases to assure the bank that you will pay. A responsibly used new credit card will begin healing your credit score.
Credit Limit
If you have credit cards where the balance is more than half of your credit limit, pay these down right away. If you owe more than half of your credit limit on any credit card, this will have a negative impact on your rating. Plan to pay down that card as soon as possible, or see about transferring some of that debt.
Opening an installment account can give quite a boost to your credit score. It is necessary to at least pay the minimum, so insure the account is something that you can pay. If you can manage one of these accounts, your credit score should improve quickly.
To avoid paying too much, you can refuse to pay off huge interest rates. It is important to know the terms of your original agreement for the debt you incurred. Usually if you agreed to the terms the terms will be upheld as legal. If you believe the charges are excessive and your debtor will not negotiate down the interest and other additional charges, state laws might provide you with additional avenues to pursue a reduction in these charges. Federal law provides that when you are billed by a collection company the fees and interest cannot exceed the amount of the original debt. Your initial agreement likely included a commitment to pay interest. The only way you are legally able to sue the creditors is if you are able to prove that your interest rates are much too high.
Stay in touch with credit card companies if you wish to repair your score. Talking to them will help keep you from drowning further in debt and making your credit worse. Politely ask if it is possible to have your minimum monthly payment adjusted or due date changed.
You need to carefully scrutinize credit counselors before you consult them for help with repairing your credit. Some counselors truly want to help you, while others are untrustworthy and have other motives. Some are simply fraudulent and are out to get your money. Intelligent customers will make sure to determine the legitimacy of a credit counseling agency before acquiring their services.
Credit Score
Before you decide to go through with a debt settlement, you should be sure you know how it will affect your credit. Some agreements cause less damage to your credit score than others, and each should be considered prior to making an arrangement with a creditor. Some creditors have no concern over how your credit score can be affected by entering into certain agreements. These people just want your money.
Take a look at your credit report if you have a bad score. You could find mistakes in dates and other factors which can cause the whole item to be removed from the report.
One excellent way to get your credit score back up is to close all your credit cards except for one. It is important to make small payments or transfer a balance to the open account. This can help you avoid paying down smaller balances and focus on paying one card off.
Always get a plan in writing if you are going to do a payment plan that deals with creditors. If there is a change of heart, this paper will protect you. After you have paid off your debt, send proof of this to the major credit agencies.
Go through all the statements you receive. Make sure that all of your fees and charges are correct and that there are not any items that were not authorized by you. The responsibility lies with you to verify that each charge is accurate.
Minimum Payment
If you have suffered job losses due to the economy, you may not have the cash to pay all the debts you owe. Make the minimum payment on each of your debts and use any leftover money to concentrate on paying off the highest interest debt. Paying each creditor something, even less than the minimum payment due, can usually appease your creditors enough that they will not turn your accounts over to collection agencies.
Hopefully these tips will be very useful in your endeavors. While fixing your credit might seem like an uphill battle, once you follow this advice, you will have the chance to regain your credit. Make sure you are patient. Have faith that your persistent efforts will pay off and that you can be debt-free.
