If you can’t sleep at night because of bad credit, it’s time to take action. The following tips are a helpful credit score improvement guide that will change your negative situation into a positive one.
Getting a traditional home loan can be difficult, if not impossible, with imperfect credit. 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 are a good option regardless of your down payment amount or funds available for closing costs.
Credit Score
If your credit is good, it’s easy to get a mortgage on a new home. Timely mortgage payments augment your credit score. Home ownership demonstrates that you have financial stability because they are secured by a valuable asset, and this results in a raised credit score. These benefits will pay off if you need to secure a loan.
Paying off any debts you have that have high interest rates can help you to avoid paying too much. Creditors are skirting aspects of the law when they hit you with high interest rates. Your initial agreement likely included a commitment to pay interest. Your interest rates should be regarded as too high if you plan on suing your creditors.
Negative-but-correct information cannot be removed from your credit report, so be wary of promises from unscrupulous companies who promise to remove it from the credit reporting agencies. These bad marks stay on your record for seven years or more. You can, however, succeed at having incorrect information erased from your credit reports.
Many credit card companies are willing to help customers by eliminated late fees or lowering monthly payment amounts. This prevents you from sinking further into debt or further damaging your credit score. You can accomplish this by simply calling and asking them to change payment terms, like your interest rate or your billing date.
Credit Counselors
Always do research before contracting a credit counselor. There are a lot of unscrupulous agencies scattered in among the few legitimate credit counselors that are really there to help you. Many others are nothing more than scams. Wise consumers always verify that credit counselors are legitimate before dealing with them.
Before you get into an agreement about settling a debt, make sure you understand how it’s going to affect your overall credit. Some methods of credit settlement can be a blow to your credit score, so it’s important to check into your options and find one that won’t hurt you in the long term. The creditor does not care what happens to your credit score, as long as they get their money.
If you are trying to improve your credit score but are having difficulty gaining access to new credit in order to do so, join a credit union. Credit unions have opportunities that are better than other places and are usually local.
Dispute every error you identify on your credit report. You should contact the credit bureaus both online and by certified letter; be sure to include proof of your claims. Always send your dispute letters certified mail, so that you can get return confirmation. This will give you proof that the agency received your dispute paperwork.
Do not file for bankruptcy. It can adversely affect your credit for up to 10 years. Although it seems like the wise thing to do at the time, it will bring you negative consequences in the long run. It may be hard to get a credit card or a loan if you declare bankruptcy.
Interest Rates
If credit score repair is something you have been considering, the first step would be to pay down your credit card balances. Work on paying off credit cards that have the highest interest rates or high balances. 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.
Doing this will ensure a good credit score. Late payments to credit cards are reported to the major credit agencies and can hurt your chances for securing a new loan.
Take the time to carefully go over all your credit card statements. Look for any changes that have happened, and make sure they are correct. You do not want to end up paying for a purchase that you did not make. The responsibility lies with you to verify that each charge is accurate.
As you’ve now learned, a credit report doesn’t have to be the stuff of nightmares. You don’t have to be afraid of your credit score; you can improve it. By following the helpful credit restoration information in this article, you can make your credit situation much better.
