If you have bad credit, companies you may want to deal with might have a negative impression of you. It also limits what you are able to do and can even have consequences on your future. It is possible to fix your credit however. Follow these tips to repair your credit.
Secured Credit Card
If you need a credit card to aid in fixing your credit but you cannot obtain one due to the state of your credit, applying for a secured credit card is an option. 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. Even though this card will be secured by your own money, you will make payments and manage it as if it were unsecured. This will improve your credit as you show yourself able to make the payments on time.
Look at the credit card accounts you have with a balance over 50% of the credit limit. Pay those off until they fall under this number. Credit card balances are among the factors taken into account when determining your credit score. Maintaining balances over 50% will lower your rating. You can attain lower your balances by using balance transfers to move debt from accounts with higher balances to those with lower balances, or by simply paying off some of your higher balances.
You can easily get a mortgage if you have a high credit score. By paying off your mortgage on time, you will even improve your credit score further. Owning your own home also improves your credit score in the form of having large assets to borrow against. Having a home also makes you a safer credit risk when you are applying for loans.
To improve your credit rating, set up an installment account. There is a minimum amount each month that you will have to pay, so be sure not to get in over your head. If you use these accounts, your score will go up rapidly.
If credit improvement 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. Regardless of their claims, these debts will stay on your report for seven years at a minimum. You can erase information that is incorrect from your credit record.
Be wary of credit repair scams that can get you in legal trouble. There are scams all over the web that teach you how to create a new credit file. Doing this is illegal, and you will be caught. Penalties can include large fines and possibly even incarceration.
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. Then, try to arrange payments or transfer your balances to the one account you left open. This way you can work on paying one credit card balance off, instead of a bunch of smaller ones.
If you are able to get a payment plan worked out with any of your creditors, make sure you get the terms in writing. If there is a change of heart, this paper will protect you. After you have paid the debt off completely, keep your receipt in case there are any discrepancies on your credit report.
Pay the balances on all credit cards as soon as you can to start the credit score repair process. Pay off accounts with the highest interest rates first. Beginning to pay your credit card balances off will show creditors that you are making a valiant effort and are credit worthy.
If you are having a lot of trouble with your credit, consider locking up your credit cards for a while. Use cash for purchases instead while you are building back your credit. When you find credit card spending unavoidable, pay down your balance immediately.
Your future will be a lot easier if you repair your negative credit. You just need to know where to start and what you can do. Repairing your credit takes some discipline and a little time. Apply what you have learned from this article, and begin your journey toward better credit.
