When your credit report contains mistakes, you credit score will be unnecessarily lowered. This will make getting additional credit difficult for you. Taking the time to fix your own credit is the way to go. Here are some tips for doing so.
Financing a home is not always an easy task, especially when you have less than perfect 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. Some FHA loans even cover a down payment or your closing costs.
Fixing credit reports must begin with a solid working plan that you are capable of adhering to. You need to change your past habits and build new, better approaches to credit. Limit your purchases only to things that are absolutely necessary. Before you open your wallet ask the questions “do I need this?” and “can I afford this?” If the answer is no to either, put it back on the shelf.
Start by paying off credit cards with accounts 50% over your limit. You can concentrate on another card once these accounts are lowered to under half of your limit. 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.
Credit Card
When trying to rehabilitate your credit, it is important to work with each credit card company you are indebted to. This will enable you to make sure to keep your credit in good standing and repair any damage that may have been caused. Credit card agents may have the authority to eliminate monthly charges, extend your due date or change your billing cycle.
Find out how your debt settlement contract will make your credit score look. Research all of your options, make an informed decision about the method you chose, and only then should you agree to the settlement. Some debt settlement companies are only after profits and do not communicate the likely consequences of their methods.
Find and challenge errors on your credit report using the dispute process offered by each credit reporting agency. Draft a dispute letter that will go to each credit rating agency that shows an error, and prepare any supporting documents. Send your dispute package with a return receipt request so that you have proof that it was received by the agency.
A first step in fixing your credit is to close all credit card accounts that are unnecessary. Aim to only have one account. You will want to either transfer your balances onto the one remaining card or set up payment arrangements, but close the account to new charges. It will be easier for you to make payments on a single credit card account, as opposed to several.
You should get all terms and conditions in writing if you choose to deal with a creditor. Having the plan in writing will protect you if the creditor reneges on the plan or if your debt is transferred to another creditor. Once it is paid off, you should get that in writing to send to the credit reporting agencies.
These are ways of protecting your credit rating. Late payments are reported to all credit report companies and will greatly decrease your chances of being eligible for a loan.
Go through all the statements you receive. Check to be sure that you actually purchased the things that are listed on your statement, so that you are only paying for things you bought. Take the reigns, and go over your monthly credit card statements. No one else will do it, it is your responsibility.
Make sure a credit score improvement agency is legitimate before choosing to work with them. There are a number of shady operators in the credit improvement business that can cost you money and do nothing for you. Far too many people have been bilked by dishonest agencies. Reading unbiased customer reviews will help you decide what company you want to work with.
Having to deal with a collection agency can be extremely stressful. Cease and desist correspondences can be legally used by a consumer to put off collection agencies; however they only help stop the harassing phone calls. These letters stop collection agencies that harassing debtors, but they don’t erase liability for the debt itself.
Unfortunately, sometimes you have more debts than you have money to pay them off. Spread your money among your creditors so that they each get a part of what funds are available. Paying at least minimum payments prevents creditors from calling collection agencies.
Work with collectors to create a realistic repayment plan. These will remain on the credit report, but will be reported as paid. This is better than having past due debt.
Be sure to document any threats that are made by a creditor or collection agency, since these are illegal. You do not have to deal with it; there are many laws that will protect you.
Credit Score
By now, you should be encouraged to know that there is much you can do to help repair your bad credit. If you use these tips, your credit score should increase quite a bit. DIY credit score improvement takes some discipline, but it can work wonders for your score.
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