Having poor credit can be a serious hindrance to moving forward with your life. A bad credit report closes doors to financial options and opportunities. There are a few steps you can take to start repairing your credit now.
If you have a poor credit rating, it can be extremely difficult to obtain a mortgage loan for a home. If this is the case, try to get an FHA loan, which are loans backed by federal government. FHA loans offer lower down payments and help with closing costs.
If your credit history has put you in the position where you are not able to obtain a regular credit card, you should try to get a secured credit card to begin rebuilding your credit. These types of credit cards often require a good faith deposit to open a new account. By using a new card responsibly, your credit rating will start to increase.
Credit Score
If you credit score is good, you should have no problem purchasing a house and obtaining a mortgage. Making mortgage payments in a timely manner helps raise your credit score even more. Credit rating companies will judge you a reliable risk when you have verifiable assets such as a home. This will be beneficial when you apply for loans.
If you find that you have a credit card and the interest rate has gotten to high, you do have the option to not pay the debt, though there will be consequences. It is bordering on illegal for credit card companies to charge you skyrocketed interest rates. Although, in reality, you did agree in advance to pay any interest charges incurred. It is likely you can have exorbitant interest rates reduced if you sue the creditor.
To start fixing your credit, you will have to pay your bills. Paying your bills on time and for the full amount is important. After you have paid off some old bills, you will see an immediate improvement in your credit rating.
A good tip is to work with the credit card company when you are in the process of repairing your credit. By keeping the lines of communication open, you will avoid getting into more debt, making your credit score even worse. Talk to the company and see if you can change your due date or monthly fees.
Don’t risk prison. There are plenty of credit scams that purport to erase your existing credit file and create a new one. This tactic is not legal, and you face serious repercussions if you are caught. In addition to the possibility of facing jail time, you could be fined, your attorney bills may be substantial, and your reputation could be ruined.
If you find any errors on your credit reports, dispute them. Send an official letter to companies that have wrongfully lowered your score, and include documentation that shows the mistake. Send any correspondence by recorded mail to ensure proof of receipt by the agency.
Credit Card
If you are having problems retaining control of your charge habits, close all old accounts except for one. Transfer credit card balances to one card for loan consolidation. By doing this, you can work towards completely paying off one credit card with a large debt, rather than working piecemeal with many smaller debts.
Go over your monthly credit card statements to check for mistakes. If you notice unwarranted fees or surcharges, contact the credit card company to avoid being reported for failure to pay.
Bankruptcy should be filed only if absolutely necessary. When you file for bankruptcy it shows for 10 years, your credit report will suffer from this. You may think that bankruptcy is your only option to rid yourself from debt, however look at your long term financial goals before deciding to file for it. If you choose to file bankruptcy, you’ll be unable to get a credit card or loan in the future.
To show that you are serious about improving your credit, start systematically lowering all of your account balances. Pay down the cards with the largest balances and interest rates first. This will show responsibility to creditors.
Doing so can help to keep good credit. Every time you make a late payment, it is logged in your credit report which can hinder your ability to take out a loan.
When lenders examine your personal credit history, they will not consider any statements you have made about the negative marks. The most it will do is draw more attention to the bad aspects of the report.
Collection Agencies
Debt collection agencies can be the most stressful part of a bad credit crisis. The consumer can use cease and desist orders, but these only stop harassment. These letters may prevent collection agencies from making phone calls, but the consumer remains responsible for paying the debt.
Be wary of any company that tells you they can instantly fix your credit. A lot of people are having difficulty with their credit, and there are lawyers that try to exploit these people with illegal and ineffective credit improvement services. Before you give a lawyer any money or any personal information, make sure to do a thorough check on them and their practice to make sure they are legitimate.
Start using credit again in order to repair damage caused by previous negative activity. Prepaid credit cards offer you the ability to build credit while not having to worry about late payments or penalties. Potential lenders will see this as a positive thing as it will show you are a responsible person.
Credit Score
A few easy steps, like the ones here, can help you repair your problems with credit and help you to maintain a healthy credit score. Having a good credit score is crucial to getting the best interest rates possible and is definitely worth the effort.
This is a limited-time offer. We are not able to guarantee availability if you wait!
