Your credit can easily be damaged by careless shopping sprees, too many credit cards or by an unexpected financial emergency. Fortunately, you can take some actions to get your credit score climbing in the right direction.
Getting money for a home loan can be difficult, particularly when your credit is less than perfect. Federally guaranteed loans (FHA loans) may be an option. FHA loans are a good option regardless of your down payment amount or funds available for closing costs.
Credit Card
There are secured credit cards available if your credit rating is too low to open up a regular credit card account. With a secured card, you have to fund your account before you use the card so that the bank will be assured that you will pay off your debts. Using this new credit card in a responsible manner will help to build back up your good credit rating.
Look at the credit card accounts you have with a balance over 50% of the credit limit. Pay those off until they fall under this number. If your credit card balances exceed 50% of their limits, it will lower your credit score, so spread your debt over multiple cards, or better, pay down the balances.
By maintaining a good credit score, you can decrease your interest rate. Lower interest rates make it much easier and quicker to pay off balances. Try to get the best offer and credit rates so you can increase your credit score.
Credit Score
A respectable credit score makes it much easier for you to purchase a home with a mortgage. Making your mortgage payment on time each month will also boost your credit score. Owning your own home also improves your credit score in the form of having large assets to borrow against. Financial stability is important should you need a loan.
Legitimate negative credit problems can not be easily wiped away from your credit rating, so be wary of companies that promise they can do so. If the information is correct, it will remain as part of your report, in most cases, for seven years. However, information that is not correct can be removed.
Begin Paying
Credit restoration requires that you begin paying your bills. More precisely, you must begin paying your bills fully and on time. Your credit rating can improve almost immediately when you pay off past due bills.
Don’t risk prison. Sites may act like you can create new credit lines and tell you how to do it. Of course, this highly illegal, and it will cause you even more problems, because it will not go unnoticed. The legal proceedings will be costly, and you may even be sent to jail.
Contact the credit card company and ask to get your card limit lowered. Not only will this stop you from overspending, it will indicate responsible behavior to a credit card company, and may enable you to get future credit.
Consider joining a credit union. They offer a lot of benefits to their members and it can be easier to obtain a line of credit from them. These credit unions can probably give you better credit options in the long run.
If you find any errors in your credit reports, you should dispute them. Contact the credit agency in writing, with documentation to support the errors that you are disputing. Send your dispute package with a return receipt request so that you have proof that it was received by the agency.
The first step in credit score repair is to close all but one of your credit accounts as soon as possible. Then, try to arrange payments or transfer your balances to the one account you left open. This can help you avoid paying down smaller balances and focus on paying one card off.
If you are determined and ready to learn, you can fix your credit in no time. Apply the advice from this article to start your march toward better credit score days.
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