Dealing with the complications that arise from having a less than perfect credit score can be quite stressful. Poor choices in your past can really come back to haunt you. Even though rebuilding your credit can be hard, it is possible. The following tips will assist you in the process.
If you don’t have very good credit, financing your home may not be easy. In this situation, it is a good idea to try to obtain an FHA loan, because these loans are guaranteed by the federal government. Even if the applicant does not have money for closing costs or a down payment, an FHA loan is workable.
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. Anyone can get one, but you must load money onto the card as a type of “collateral”. If you use a credit card responsibly, you will go a long way in repairing your credit.
Pay down any credit cards with a balance in excess of 50%, preferably getting them down to 30%. Carrying a balance of more than half your credit limit negatively impacts your credit score. Either pay this balance down or spread it out over multiple cards.
Installment Account
If you make a decent income, consider an installment account when you want to give your credit score a boost. Open an installment account that you can pay for and make sure to keep an affordable monthly minimum on it. If these accounts are properly managed, they can provide a quick boost to your credit score.
Contact the credit card company and ask to get your card limit lowered. You will not be able to spend too much and they will see that you are responsible.
Take a look at credit card bills to make sure that every item is one you have charged. If there are, you will need to contact the company immediately to avoid them reporting this to a credit reporting agency,
If you and a creditor agree on a payment plan, make sure the agreement is committed to paper. Any plan that you agree on should be put in writing and signed by both parties to protect you in the future. You also want it in writing if it gets paid off so you can go ahead and send it to credit reporting agencies.
Bankruptcy should only be viewed as a last resort option. This will have damaging consequences to your credit score for ten years. While ridding yourself of most debt may seem ideal, it is not without consequences. It may be hard to get a credit card or a loan if you declare bankruptcy.
Interest Rate
Paying the balances of your cards as fast as you can will help your credit score. Sort your credit cards by balance and interest rate with the highest first. Then determine which credit card is the highest either in balance or interest rate and start to pay it off first. Doing so shows your lenders that you are responsible.
Do not carry high balances on any of your credit accounts. Your credit score can be raised just by reducing your balances. Increments of twenty of available credit are noted by fico.
Although they mean a lot to you, these statements are often set aside when lenders go over your credit history. Inclusion of the defending statement could actually have the opposite effect as it brings more attention to the fact that you have a negative mark on your report.
Each time you get a new credit card can negatively effect your credit score. Opening new lines of credit can hurt your score greatly, even if you get approved. Your credit score will lose points every time you apply for, or are offered, new credit.
If you use the tips contained in the above article, you can turn that dreadful 350 into a nice, shiny 850. The greatest thing you can do is to consistently pay your bills on time. Start working at rebuilding your credit!