When your credit report contains mistakes, you credit score will be unnecessarily lowered. This will make getting additional credit difficult for you. Taking your poor credit situation into your own hands and doing something to make it better is generally considered best for getting you back on your feet again. Here are a few ideas for fixing your credit.
Having poor credit makes financing a home a nightmare. There is, however, alternative types of funding available that are offered by the banks. FHA and USDA are two such agencies who offer finance to those with lower credit scores, sometimes with low down payment and closing cost clauses. FHA loans offer lower down payments and help with closing costs.
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. You will most likely be approved for this type of card, but you will have to add money to the card before you can use it so the bank will know that you can pay for all of your purchases. Responsible use of a credit card can help rebuild your credit.
Interest Rates
If you want to avoid paying a lot, you can pay off debts that have a huge interest rate. When a creditor hits you with incredibly high interest rates, you may have a case for negotiating to a lower amount. Your initial agreement likely included a commitment to pay interest. If you plan on suing your creditors, you may be capable of having the interest rates viewed as being too high.
Credit counselors should always be researched thoroughly before being consulted for credit improvement. While many counselors are reputable and exist to offer real help, some do have ulterior motives. Some credit services are nothing more than fly-by-night scams. It is smart to verify the legitimacy of credit counselors prior to getting involved with them.
Give the credit card companies a call and find out if they will lower your credit limit. By doing this it will stabilize you in your financial boundaries instead of letting you extend beyond what you really should.
Too many credit cards is a common cause of financial strain, so close all of your accounts aside from one. Transfer your balances to this one card, with the lowest interest, if this is possible. Doing this will allow you to focus on paying off one large credit card bill, instead of several smaller ones.
Payment Plan
If a creditor agrees to give you a payment plan, get that payment plan in writing. This will give you important documentation in case of an ownership change or if the creditor tries to back out of the agreement. After you have paid your debt, request appropriate documentation that confirms your zero balance.
Do everything you can to avoid bankruptcy. This will reflect on your credit report for the next 10 years. It may seem like the right things to do, but your future will be affected. If you do file for bankruptcy, it will be extremely difficult to get approved for a loan or a credit card for many years, if ever.
Take the time to carefully go over all your credit card statements. Take a second look to make sure that you are being charged only for what you actually purchased. You must be accountable for each item on your statement.
Don’t use credit cards a lot. Pay for things with cash whenever possible. If you do use a credit card, pay the full balance each month.
Collection Agencies
One of the biggest stressors can be bad dealings with debt collection agencies. Debtors can stop harassment by collection agencies with cease and desist notices, but know that this is all they do. The consumer still has to pay disputed debts even though these letters stop agencies from calling.
Do not trust anyone who promises you miracle results. There are a lot of scam lawyers out there who will charge you a lot of money for credit score repair techniques that don’t really do much. Do your homework and check out any attorney before you hire one to help with credit repair.
Sometimes you have a large number of outstanding credit bills that need your attention, overwhelming you. To make sure everyone gets a share, spread out your money distribution. Paying at least minimum payments prevents creditors from calling collection agencies.
Be aware that threats made by a bill collector are illegal. As a consumer, you are protected by certain laws, and you need to be aware of them.
Credit Counseling
If you are unable to make minimum payments, contact the better business bureau for information on a trustworthy credit counseling service. These organizations are designed to help you and your creditors work together to design payment plans. They will also help you take care of your finances moving forward. Credit counseling can give you the tools you need in order to keep track of your finances and stay out of debt in the future.
As shown here, you can do a number of things to help repair your credit and get back on solid footing again. Using the tips in this article will help boost your credit score. You can fix your credit by yourself, and you will win in the long run.
