It is likely you have done something to damage your credit rating at some point in your life, whether it was a shopping spree, a predatory loan or just being a victim of bad economic luck. The good news is that there are some things that you can do to repair it.
An imperfect credit rating can make financing a home even more difficult than normal. Federally guaranteed loans (FHA loans) may be an option. Even when the resources for making down payments or paying closing costs are lacking, FHA loans can help.
If you want to fix your credit, you must first conjure a workable plan that you can stick to. You can’t just make up a plan and not change how you spend your money. Don’t buy the things that aren’t needs. If the thing you’re looking at is not both necessary and within your budget, then put it back on the shelf and walk away.
If you have a card that carries a balance of over 50% of the limit, you should pay it down to below 50%. Creditors like to see you using your accounts, but still keeping your balances under 50% of your allotted credit.
If you are doing hardcore credit repair, you need to scrutinize your report for negative entries. If you notice a mistake on your report, you could get some items crossed off. Even if the item itself is right, an error in the date or amount gives you the right to contest it.
If you find any errors on your credit reports, dispute them. Report any errors to the three credit reporting agencies. Be sure to include any documents to support your case. Your letter should be sent with a request for return receipt, so you can have a record that it was received by the reporting agency.
Credit Card
Check your credit card statement each month and make sure there aren’t any discrepancies. If such fees are present, you need to get in touch with the credit card company right away to avoid adverse action.
Always get a plan in writing if you are going to do a payment plan that deals with creditors. This will provide proof of your agreement in case any problems ever arise. When the debt is eventually paid or settled in full, you should request documentation of this and forward copies to the primary credit reporting companies.
You will be able to keep up with your bills, and get a good credit score. Every late payment appears on a credit report, and could potentially hurt your chances at a loan.
Credit Score Repair
Look for a credit restoration agency that is legitimate. There are lots of disreputable credit score repair agencies out there. Slimy operators are quite common, so beware of credit score repair scams. One way to separate the wheat from the chaff is to check user reviews online.
When repairing your score, be cautious of law offices and lawyers that promise fixes for credit. Since there so many people struggling with their credit today, there are a lot of businesses that have popped up to take advantage of the situation. Make sure any credit improvement service you consider has a positive standing with the BBB.
Your credit rating will also suffer from opening new lines of credit. Opening new lines of credit can hurt your score greatly, even if you get approved. If you continue to increase your debt, your credit score will continue to drop.
Devise a plan for paying off any collection accounts or past due debts. These accounts will still appear on the credit report, but will be showed as paid. This shows future creditors that you made good on your debt.
Make any records of any threats that a collector makes because it is highly illegal of them to do that. Laws such as the FDCPA exist to stop debt collectors from harassing debtors.
Credit Counseling
If you have problems adhering to a budget, it may help you to consult a reliable credit counseling service to help you develop a budget that works for you. Agents at these organizations can negotiate with creditors to set up payment plans for your debt, and they will teach you how to dig out and stay out of debt over time. Credit counseling helps you learn how to best manage your finances and meet your obligations.
Nursing your credit back to good health is not as hard as it looks at first, especially when you are willing to make a persistent effort and listen to good advice. The information given in this article is sure to lead you to a higher level of financial security.
