Whether you fell prey to the guys handing out credit cards like candy on campus, got carried away on one too many shopping sprees or got hit hard by the recent economic downturn, you probably did some damage to your credit. The good news is that there are some things that you can do to repair it.
Getting home finance can be quite tough when your credit rating is not good. See about getting an FHA loan, which are loans that the federal government guarantees. FHA loans are a good option regardless of your down payment amount or funds available for closing costs.
Credit Card
When your credit is so bad that you can’t get a ‘regular’ credit card, a secured one will help you to repair your credit. These accounts are much easier to get as you will have to fund the new account ahead of time with a deposit to cover any purchases. Responsible use of any credit card can help your credit rating. However, never forget that irresponsible use will get you in trouble every time.
By maintaining a good credit score, you can decrease your interest rate. This should make your monthly payments easier and allow you to pay off your debt much quicker. Paying your outstanding balances on time is the best way to keep your credit in check, and to obtain lower interest rates.
If your credit is good, it’s easy to get a mortgage on a new home. You can improve your credit by paying your mortgage on time. Once you own a home, you will have financial stability secured by your assets, thus a good credit score. This will be beneficial when you apply for loans.
You must pay your bills consistently if you want to repair your credit. You should pay your bills in full each month. Do not let them fall behind again and get yourself in trouble. This will improve your credit score. The score rises as soon as you start making some headway on your overdue bills.
As you work toward repairing your credit score, you should be willing to cooperate and work with your creditors. This will keep you from increasing the amount of debt that you have. You can do this by speaking with them and asking to change the monthly charges or due date.
Always do research before contracting a credit counselor. Many companies are legitimate and hold your best interests as a priority, but some are outright scams. Other programs, while they sound good, are complete and total scams. It is smart to verify the legitimacy of credit counselors prior to getting involved with them.
Do not get mixed up in things that may lead you to imprisonment. Don’t buy into scams that suggest you create new credit files. This tactic is not legal, and you face serious repercussions if you are caught. The criminal charges that you face will be very expensive, and you may also have to serve prison time if found guilty.
Credit Companies
Ask credit companies to lower all of your card limits. This will keep you living within your budget, and will show the credit companies that you repay debts. This will allow you to get credit easier in the future.
When you are attempting to improve your credit score, carefully comb over your credit reports for negative information. Even if the negative report is true, if you can locate an error in the report, it may be possible to get it removed.
Dispute every error you identify on your credit report. Gather your support documents, make a list of the errors, and compose a letter to pertinent agencies. Make sure that you ask for a return receipt so that you know your letter makes it to its intended destination.
Bankruptcy should only be viewed as a last resort option. It is noted on someone’s credit report for 10 years. Although it seems like the wise thing to do at the time, it will bring you negative consequences in the long run. Bankruptcy destroys your ability to get any sort of loan for at least a few years, so don’t file unless you have to.
Timely payments will keep your credit status in good standing. Anytime you don’t make a payment on time it can damage your credit and it can be hard to get a loan anywhere.
Be wary of any company that tells you they can instantly fix your credit. Due to the large number of people experiencing credit difficulties, predatory lawyers have sprung up who charge big fees for credit repair services that are either useless or illegal. Do the research on your lawyer before you call them.
Debt Collectors
It is illegal for debt collectors or companies to threaten you. If this happens, be sure to document it. Laws such as the FDCPA exist to stop debt collectors from harassing debtors.
If you are having a difficult time creating or sticking to a budget, get in touch with a responsible credit counseling organization. These organizations can help you by negotiating with creditors to resolve a payment plan. Good credit counseling can help you understand the best, easiest ways to oversee your finances and pay your financial obligations.
If you are determined and ready to learn, you can fix your credit in no time. Apply the tips you learned here and get started on your way to good credit.
