Having poor credit can be a serious hindrance to moving forward with your life. A low score will close the doors on many financial options and stop you from being able to make your own choices in life. There are a few things you can do to improve and protect your credit.
Financing a home is not always an easy task, especially when you have less than perfect credit. If possible, apply for an FHA loan; these loans are backed by the United States government. FHA loans are great for the individuals that do not have the financial capability to make down payments.
If you find that you have a credit card and the interest rate has gotten to high, you do have the option to not pay the debt, though there will be consequences. When a creditor hits you with incredibly high interest rates, you may have a case for negotiating to a lower amount. However, when you signed up for the line of credit you also agreed to pay the interest. You may wish to make a legal claim that the interest rate charged exceeded your state’s statutory limits.
If credit score 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. These things are, generally, on your record for seven years. It is true, however, that you can remove inaccurate information from your report, but you do not need the assistance of a consultant to do so.
Contact the credit card issuer with a request to lower your card’s limit. Not only will this prevent you from owing more, but it will be reflected in your credit score because it shows that you are responsible with your credit.
If you are living beyond your financial ability, stop now. This will require a change in your thinking. If you’re buying flashy items to boost your reputation, consider that a smart person who isn’t being chased by collectors will have an even better reputation! It is important to look closely at your finances and see what you can actually afford and what you can not.
A first step in fixing your credit is to close all credit card accounts that are unnecessary. Aim to only have one account. You can transfer all of your balances to one credit card, ensuring you choose the one with the lowest interest rate. This allows you to pay off one credit card bill rather than many smaller ones.
Many times you and your creditor can work together to come up with a prepayment plan. If so, be sure you get a written agreement stating the terms. This will protect you should the company change its policies. Once the debt is fully paid, you need to get a statement verifying this from the creditor and send it to each of the major credit bureaus.
Bankruptcy should be filed only if absolutely necessary. It is noted on someone’s credit report for 10 years. It may sound like a good idea at the time to rid yourself of all your debt, but it will affect you later on. Once bankruptcy has been filed, it could permanently halt your chances of ever obtaining credit again in the future.
If you want a higher credit rating, you will need to bring down the balance on any existing accounts. Having a lower balance will boost your credit score. When balances are 20, 40, 60, 80 and 100 percent of the total credit available, the FICO system takes note of it.
You may want to argue against the reports, but potential lenders will not take your statements into consideration. In fact, it could actually make matters worse by bringing to their notice the negative aspects of your report.
Overwhelming issues occur when you have multiple debts you can’t pay. You should spread out the money you do have to spend so that all of your creditors get a share. Even if you can only meet the minimum payment, you will avoid having the bill sent to collections.
Your credit score suffers each and every time you make the choice to get a new credit card or line of credit. It may be tempting to get a new account when there are bonuses offered at the check out, but you should stop and think about it first. As soon as you open a new credit line, your credit score drops.
You should devise a plan to get your debts paid off. They are still going to show up on your credit report but they are going to be marked as paid so you will not have to deal with the ill effects of having unpaid debt that is past due.
It is illegal for debt collectors or companies to threaten you. If this happens, be sure to document it. You are protected by law, and you need to know that.
If you are having difficulty managing your finances, get in touch with a legitimate credit counselor. These companies often cooperate with your creditors so you can have a good repayment plan and improve your finances. Credit counseling can assist you in finding the best method of effectively managing your finances so that you can meet all obligations you have.
Applying simple tips like the ones given in this article will help you solve your credit problems. Time learning how to repair your credit, means a great future with many transactions since you will have a good score.