The sooner you confront your debt, the less damage it will do. Understanding how much debt you owe may keep you from creating new debt. So now it is time to exercise crisis management and to repair your credit score. The following information is quick, simple and can help repair your credit if followed correctly.
Getting home financing is no small feat, especially if your credit score is less than perfect. If this is the case, you can apply for a loan through the Federal Housing Administration (FHA). The credit requirements for these loans are more lenient than those of conventional lenders, and the federal government also guarantees the loans. You may even qualify for an FHA loan if you don’t have enough money for a down payment or the closing costs.
Any credit cards that have balances over 50% of your limit should be paid off until they are less than 50% of your limit. Carrying a balance of more than half your credit limit negatively impacts your credit score. Either pay this balance down or spread it out over multiple cards.
Interest Rates
If your creditors try to jack up your interest rates, do not pay them. You may be able to challenge an interest rate that is extremely high. You did however sign a contract that agrees you will pay off all interests as well as the debt. Should you sue any creditors, it is important to push the fact that the interest rates are outrageously high.
Negative-but-correct information cannot be removed from your credit report, so be wary of promises from unscrupulous companies who promise to remove it from the credit reporting agencies. If the information is correct, it will remain as part of your report, in most cases, for seven years. But, you should remain mindful of the fact that errors can be deleted from your report.
Learn what affect a debt settlement plan will have on your credit rating before you sign up. There are ways to go about this that will have less of an impact and should be learned about before you make any kind of deal with a creditor. The creditor does not care what happens to your credit score, as long as they get their money.
If you’re trying to fix your credit, be sure to check all your negative reports carefully. Even if a charge held against you is legitimate, any problems with its details, like the date or the amount owed, could make the entire entry invalid and eligible for removal.
Credit unions are an option for those who have run out of options when trying to find a line of credit to boost their score. They have opportunities that other banks can’t match since they are local, and don’t have to follow some of the same regulations.
If you find a mistake on your credit report, be sure to dispute it! Draft a letter to reporting agencies disputing negative entries and also submit any available documentation. Mail your dispute documents to the agency using certified mail and a return receipt so that you can prove the agency received them.
Credit Card
Take the time to ensure each month’s credit card bill is correct. If such fees are present, you need to get in touch with the credit card company right away to avoid adverse action.
Find a legitimate credit score repair agency to work with. As with most industries nowadays, there are a number of shady companies offering credit repair. There are many people who have been the victim of a credit score repair scam. If you read enough reviews, you can find out which ones are good and which are bad.
You may want to argue against the reports, but potential lenders will not take your statements into consideration. The most it will do is draw more attention to the bad aspects of the report.
Collection Agencies
One of the most nerve-racking aspects of being in debt, and having bad credit, is dealing with collection agencies. If a debt collection agency is harassing you, writing a cease and desist letter can stop the harassment. Although these letters make collection agencies cease contacting people, they are still expected to pay their debts.
An unfavorable credit score can be brought about by multiple outstanding accounts and no means of settling those debts. Spread your payments to all of your different creditors. Even if you can only meet the minimum payment, you will avoid having the bill sent to collections.
Create a plan in order to pay back your debts. When these accounts get paid off, they are still on your credit history, but they are then marked as paid, which is far less damaging to your score.
Be sure to document all information if a collector threatens you; this is not legal. Laws which protect debtors exist, and it’s vital that you understand them.
Fixing a bad financial situation requires common sense rather than monetary skills. Using this easily-understood information can help you reach your goal.
