Having bad credit can be a real headache. It can prove to be very frustrating when you find yourself constantly haunted by your past and the poor decisions you made. Rebuilding your credit is a challenging process, but it can be done. Here are some great ideas to get you back on track.
Financing a new home can be a challenge, especially if you have a history of bad credit. You should consider getting a FHA loan they are backed by the government. It might be possible to get an FHA loan even if you don’t have the money for a down payment or the closing costs involved.
Credit Card
Try to get a secured credit card if you are not eligible for an unsecured card. This will help you fix your credit. The account is funded in advance, which provides the lender with a level of insurance against unpaid debts. This is why secured cards are often easier to get. If you use a credit card responsibly, you will go a long way in repairing your credit.
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%. If you have a balance that is more than 50 percent, your credit score will drop. If you can, pay the balances on your cards; if not, do your best to pay as much as possible each month.
If you don’t want to pay too much at a time, you can avoid paying higher interest rates than you started with. You may be able to challenge an interest rate that is extremely high. However, you did sign an agreement to pay the interest. If you plan on suing your creditors, you may be capable of having the interest rates viewed as being too high.
If credit score repair is something you are investigating and a company has told you they can strike true, but negative, information off of your credit report, they are lying. These things are, generally, on your record for seven years. Incorrect information may be erased though.
Credit Counselor
If you are looking into a credit counselor, be sure to find out information about them before you choose to use them. While many counselors are reputable and exist to offer real help, some do have ulterior motives. Others are outright scams. Before you conduct any business with a credit counselor, check into their legitimacy.
Don’t get involved in anything that could get you arrested. You should steer clear of internet programs that show you how to clear your credit. This tactic is not legal, and you face serious repercussions if you are caught. You could go to jail if you have a lot of legal issues.
Credit Card
Requesting that your credit card limits be lowered can benefit you. It will keep you from overextending yourself financially, it sends a great signal to the credit card companies that you are a responsible borrower, and you will have an easier time getting credit in the future.
Before you agree to settle your debt, you need to know how your credit will stand afterwards. Some debt settlements are better than others. Do your homework and find out how your score will be impacted before agreeing to anything. Some creditors have no concern over how your credit score can be affected by entering into certain agreements. These people just want your money.
Dispute every error you identify on your credit report. Write a dispute letter to any agencies with recorded errors, and include supporting documents. Also include a request for a return receipt to make sure the agency gets it.
Check your credit card carefully each month to ensure that there’s no incorrect information. Immediately report any errors to your credit card company to prevent a bad mark on your credit report.
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 is a great way to have documentation of the plan if the creditor changes their mind or the company ownership gets changed. Once you make the final payment, get a statement that verifies that the debt has been satisfied and send it to the various credit reporting agencies.
One of your main tasks in credit score improvement is paying off your cards as fast as you can. No matter what the balances are on your credit cards, pay down the highest interest rate cards first. This will show creditors that you are responsible with the cards.
Lenders are not likely to include the statement in their decision process. The action of making a statement about your negative history will work against you as it highlight your mistakes rather than downplaying them.
If you are trying to fix your credit, be aware of lawyers who claim to instantly fix your credit. Since a lot of people go through credit problems, predatory lawyers emerged that charge huge fees to repair their client’s credit in ways that are either illegal or useless. Look into potential lawyer help carefully to make sure you aren’t being scammed.
Do not open more lines of credit that you can afford. Don’t be tempted to get a new credit card even if it promises you discounts at stores. If you open a line of credit, your credit score will be greatly reduced.
You can get your credit score looking much healthier by taking advantage of this advice. The greatest thing you can do is to consistently pay your bills on time. Clawing back from a credit disaster is doable, so stop making excuses and start today!
