Bad credit is an unfortunate detour on the road of life. A bad credit report closes doors to financial options and opportunities. Yet, some simple steps can fix your credit and help you to keep your credit in good standing.
Getting a traditional home loan can be difficult, if not impossible, with imperfect credit. If this is the case, you can apply for a loan through the Federal Housing Administration (FHA). The credit requirements for these loans are more lenient than those of conventional lenders, and the federal government also guarantees the loans. Even when the resources for making down payments or paying closing costs are lacking, FHA loans can help.
If you want to fix your credit, you must first conjure a workable plan that you can stick to. You have to stay focused and committed if you want to make concrete changes to your financial situation. Only purchase something if you cannot live without it. Put each potential purchase to the test: is it within your means and is it something that you really need?
Credit Card
Make sure that you are never using more than 50% of your credit card’s limit. If you owe more than half of your credit limit on any credit card, this will have a negative impact on your rating. Plan to pay down that card as soon as possible, or see about transferring some of that debt.
To improve your credit rating, set up an installment account. All installment accounts must stay above the set monthly minimum, so only open one if you can afford it. If you use these accounts, your score will go up rapidly.
If your creditors try to jack up your interest rates, do not pay them. When a creditor hits you with incredibly high interest rates, you may have a case for negotiating to a lower amount. However, you agreed to pay the interests off when you signed the contract. If you’re going to try taking your creditors to court, make sure you can prove the interest rates they charged were excessively high.
No credit repair company can remove factual information, no matter how damaging, from your credit report. This information can stay on your record for about seven years. It is true, however, that you can remove inaccurate information from your report, but you do not need the assistance of a consultant to do so.
To start fixing your credit, you will have to pay your bills. More specifically, pay them on time and in full. Your credit score starts to improve immediately upon paying off some of your past due bills.
As you work toward repairing your credit score, you should be willing to cooperate and work with your creditors. If you do this you will not go into debt more and make your situation worse than it was. This can be accomplished by negotiating with them for a change in due date or monthly charges.
Call your credit card companies and request that they lower your limit on your cards. Not only can this tactic prevent you from getting yourself in over your head with debt, but it can also imply that you are responsible to those companies and to any future companies.
Joining a credit union may be a way to boost your credit score when you are having a hard time getting credit. Credit unions sometimes have better rates and more options for your credit rather than a large bank. You can base this on how well the economy is in your area instead of the national situation.
If you find any errors in your credit reports, you should dispute them. You should contact the credit bureaus both online and by certified letter; be sure to include proof of your claims. When you mail your dispute package, be sure to make arrangements for confirmation of receipt. In this way, you will have documentation that your information has been received.
The tips you just read are just a few simple strategies you can employ to rebuild your credit and keep it squeaky clean going forward. The time you take to learn how to repair your credit is worth the trouble it saves you.
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