Bad credit is a particularly troublesome life problem that can haunt you for years. It can prevent you from leading the life you desire and living your life to its full potential. Here are a few easy tips on how you can fix your credit and make sure it stays positive in the future.
An imperfect credit rating can make financing a home even more difficult than normal. If you do have poor credit, try to get a FHA loan because there is a guarantee that it will be given to you. FHA loans even apply for someone who doesn’t have closing costs or the funds that are needed for down payment.
Secured Credit Card
A secured credit card might be a good option for the person with a poor credit score. 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. A new credit card, used responsibly, will help repair your credit rating.
A lower credit score can get you a lower interest rate. This can help lower your monthly payments, and help you pay them off quicker. The key to paid off credit is to find a great offer and a competitive rate so that you can pay off your debt and get a better credit score.
If your debt includes large amounts for interest charges contact the debt collector and see whether you can pay the original debt and avoid some of the additional interest charges. Creditors are skirting aspects of the law when they hit you with high interest rates. You did however sign a contract that agrees you will pay off all interests as well as the debt. If you plan on suing your creditors, you may be capable of having the interest rates viewed as being too high.
If you want to fix your credit avoid companies claiming they can remove all of your issues, even those properly reported. These bad marks stay on your record for seven years or more. If there is incorrect, negative information, you can get it removed.
Credit Unions
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. Local credit unions might have different credit products than national banks, because they can focus on local market conditions.
Dispute any errors that are on your credit report so they are removed. You should compose a letter to the agencies that have made the errors, and provide proof that you are correct. Send any correspondence by recorded mail to ensure proof of receipt by the agency.
Do not live beyond your means. You need to change your thinking to consider your future goals, not just buy all of the things you want right now. Getting credit has never been easier, making it just as easy for people to buy items they simply can’t afford. This, though, comes with a hefty interest price tag. Examine your budget, and figure out how much extra money you have to shop with.
If you work out a payment plan with a creditor, you should make sure to get the plan in writing. This way you have documentation of the agreement in case the creditor decides to change their mind or ownership of the company changes. You also want it in writing if it gets paid off so you can go ahead and send it to credit reporting agencies.
Avoid filing for bankruptcy. The record of the bankruptcy appears on your report and affects your credit rating for up to 10 years. While getting rid of your debts all in one go seems like an excellent idea, your credit will be affected by it for a long time to come. By filing for bankruptcy, you might have a lot of trouble getting a credit card or qualifying for a loan in the future.
Credit Card
When you receive your credit card statement, go over it carefully. Really analyze the purchases on your card to make sure you are not receiving any errant charges for items you never purchased. Take the reigns, and go over your monthly credit card statements. No one else will do it, it is your responsibility.
Try and pay down any revolving account balances in order to boost your credit score. Having a lower balance will boost your credit score. The FICO system notates when a balance on a card is at 20,40,60,80, and 100 percent of the total available credit.
Make sure that the credit improvement agency you choose to work with is reputable. You have to watch out for credit repair agencies that promise more than they can deliver or are simply fraudulent. Lots of people get taken in by scammers. You need to research customer feedback so you can determine if a company is trustworthy or not.
Lenders do not care about the reason you have negative information on your credit report. Having some positive credit history is the only way that negative reports can be counteracted when lenders are analyzing your credit liability. The basic reason for bad marks on credit is simple. You did not pay something you were supposed to pay. Lenders are often discouraged by people that make excuses for bad credit.
If you have suffered job losses due to the economy, you may not have the cash to pay all the debts you owe. Take out a little money for each one of the creditors that you owe. Even if you can only meet the minimum payment, you will avoid having the bill sent to collections.
Credit Score
Whenever you apply for and open a new credit account, your credit score may drop. When you are offered a credit card when checking out at the store, fight the urge to get one to receive the discounts that are offered to you. Your good credit score will suffer a small dip each time you open a new account.
Having read these simple tips, the only thing left now is to apply them. A good credit score is essential to financial freedom, take the time to learn about fixing your credit.
