It is easy to lower your credit, whether it be with shopping sprees or having too many credit cards. If you’re one of the many people with credit problems, read on for some ways to improve your situation.
An imperfect credit rating can make financing a home even more difficult than normal. If you are in this situation you should look into FHA loans before speaking with a bank. FHA loans are a good option regardless of your down payment amount or funds available for closing costs.
If you have to improve your credit, make a solid plan and follow it. You have to be committed to making real changes to your spending habits. If you don’t need something, don’t buy it. Ask yourself if a certain purchase is both necessary and affordable. Buy the item if your answer to this question is “yes”.
Some sound advice to follow, is to be sure to take the time to contact your credit card company and work with them. This will help you stabilize your situation and start working towards a better financial situation. Some of your options include negotiating for a later due date, and asking for reductions in your minimum monthly payments.
Do not do anything that will make you end up in jail. There are scams all over the web that teach you how to create a new credit file. It’s illegal to do this and you can get caught easily. You could go to jail if you have a lot of legal issues.
Call and request lower limits on your cards from the credit card companies. 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. Whenever you see any, it will be necessary to discuss the situation with your creditor so that they do not submit negative information to the credit agencies.
If you are able to get a payment plan worked out with any of your creditors, make sure you get the terms in writing. The documentation you gain from the creditor is important in case the company changes ownership or the creditor is no longer interested in the deal. When you pay it off, send a written copy of proof of payment to all three credit reporting agencies.
Bankruptcy should be filed only if absolutely necessary. Bankruptcy can make getting credit almost impossible for many years. Bankruptcy not only zeros out your debt, it also zeros out your credit score. If you do file for bankruptcy, it will be extremely difficult to get approved for a loan or a credit card for many years, if ever.
If you are late with your payment, your credit status will suffer. Each late payment that you make shows on your personal credit report and can hurt you when the time comes to take out a loan.
Credit Score
To earn a higher credit score, keep revolving account balances low. Having a lower balance will boost your credit score. The FICO system notates when a balance on a card is at 20,40,60,80, and 100 percent of the total available credit.
Do not use your credit cards. Use cash to pay for things whenever possible. If you are forced to use credit, pay it back immediately.
Collection Agencies
Debt collection agencies can be the most stressful part of a bad credit crisis. Cease and desist documents can be used to hold back collection agencies, but only to stop harassment. While such letters stop collection agencies from calling, the consumer is still obligated to pay the debts being disputed.
If you have a lot of debt that you cannot pay, it can create a mess. Make the minimum payment on each of your debts and use any leftover money to concentrate on paying off the highest interest debt. Even if all you’re making is minimum payments, this will keep you out of collections.
In order to start the process of credit restoration, it is wise to seek new credit as a way to re-establish yourself. Prepaid credit cards help you re-establish credit without the risk of falling into an even deeper hole due to delinquent payments. This will help you prove to lenders that you can be responsible, and are credit worthy
You should record any threats you get from collections agents. There are consumer laws which limit the things that a collection agency can do to you.
Addressing a bad credit report might seem daunting at first, but if you learn the tricks and stick to the process, you can improve your credit dramatically. With the advice you were given in the above article, you can get to work on improving your credit score today.
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