Do you hate your life because your credit sucks? In the current economy, it’s not uncommon to see credit scores quickly declining. Luckily, you can improve your score and start now with the tips in this article.
If you have a poor credit rating, it can be extremely difficult to obtain a mortgage loan for a home. Look into alternative financing options like FHA loans. You may even qualify for an FHA loan if you don’t have enough money for a down payment or the closing costs.
The first step in repairing your credit is figuring out a plan that works for you, and sticking with it. Real changes come from commitment to healthy spending habits. Sticking to necessities for a while is crucial. When considering a purchase, ask yourself if the purchase is necessary and affordable, if you answer yes to both, you should buy it.
Secured Credit Card
If you want to repair your credit but do not qualify for a regular credit card, consider a secured credit card. When you open a secured credit card account, you place money on deposit to cover any charges you may make. This ensures in advance that you will have enough money to pay for your debt. Limited spending and regular payments can turn a new credit account into a valuable credit score repair tool.
When looking over your credit report, look closely at the negative report that are listed. Even if the item itself is correct, any small mistake in the item, such as an inaccurate date or amount, may let you have the whole thing taken off your credit report.
If getting a new line of credit is vital to your credit improvement efforts, look into joining a credit union. They may offer better rates and more credit due to local conditions as compared to national ones.
Don’t spend more than you make each month. This takes a real mindset change. In years past, many people relied on credit cards to make major purchases, but now those risky financial choices are catching up with them. Keep track of your spending habits and income, then realistically create a budget that will get you out of your debt dilemma.
Payment Plan
If a creditor agrees to give you a payment plan, get that payment plan in writing. If there is a change of heart, this paper will protect you. If you have finished paying it off, you should request a confirmation so you can send it to the credit reporting agencies.
To show that you are serious about improving your credit, start systematically lowering all of your account balances. First, pay down your credit card balances, starting with the highest interest. Your debt will not grow as fast as before, if you get rid of high interest rates first, and your creditors will see you are making efforts.
Making your payments on time shows lenders that you are serious about maintaining good credit. Credit card companies are one of the few businesses that report on a regular basis. Paying late can severely hurt your credit score.
Make sure the credit repair agency is reputable. There are lots of disreputable credit improvement agencies out there. Unfortunately, there have been quite a few people who have been scammed by these companies. See if the company in question has a reputation on any of the user review sites before you commence business with them.
It is obviously somewhat difficult to let derogatory marks stand undefended, but the evidence suggests most lenders don’t use those statements in determining creditworthiness. The action of making a statement about your negative history will work against you as it highlight your mistakes rather than downplaying them.
Collection Agencies
One of the most stressful things about poor credit is dealing with debt collection agencies. Cease and desist instructions can be used to ward off debt collectors to a point, but only really to prevent harassment. These letters may prevent collection agencies from making phone calls, but the consumer remains responsible for paying the debt.
If your low credit score has been a source of frustration and discouragement, implement this advice to change all that. This advice can make all the difference between having a bad or good credit score.
