You have most likely done damage to your credit, whether you got a card from friends, went on too many shopping trips or were hit by economic pressures. Fortunately, you can take some actions to get your credit score climbing in the right direction.
Financing a home is not always an easy task, especially when you have less than perfect credit. If possible, apply for an FHA loan; these loans are backed by the United States government. FHA loans are great for the individuals that do not have the financial capability to make down payments.
The first step in credit improvement is to build a plan. You have to be committed to making real changes to your spending habits. Only purchase something if you cannot live without it. You should only make a purchase if it is necessary and it fits in your budget.
Credit Card
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. With a secured card, you have to fund your account before you use the card so that the bank will be assured that you will pay off your debts. If you use a credit card responsibly, you will go a long way in repairing your credit.
Excessive interest rates can be contested. However, it is best not to sign contracts containing them in the first place. It is bordering on illegal for credit card companies to charge you skyrocketed interest rates. Keep in mind that you did sign a contract agreeing that interest rates were acceptable. It is possible that you can sue a creditor and claim that the interest rate charged is unreasonably high.
You need to work with the companies from whom you have credit cards. If you do this you will not go into debt more and make your situation worse than it was. Politely ask if it is possible to have your minimum monthly payment adjusted or due date changed.
When you want to rebuild your credit, take a close look at any negative reports that are harming your credit. If you notice a mistake on your report, you could get some items crossed off. Even if the item itself is right, an error in the date or amount gives you the right to contest it.
Joining a credit union is a great way to build your credit if you are having a difficult time doing so elsewhere. They may offer better rates and more credit due to local conditions as compared to national ones.
If you find a mistake on your credit report, be sure to dispute it! Gather all supporting documents and any errors you find, and send them with a letter to the credit reporting agencies. Send your dispute package with a return receipt request so that you have proof that it was received by the agency.
Credit Card
If you are having problems retaining control of your charge habits, close all old accounts except for one. Call your credit card company and try to work out a repayment plan, or transfer the balances of multiple cards to one lower interest card. By doing this you can make your bills more manageable. Instead of a mailbox full of credit card bills, you will only have one.
Do not file for bankruptcy if you do not have to. Bankruptcy will be noted on the credit report for 10 years, afterwards you must rebuild from scratch. Though it may seem necessary at the time, you should weigh the costs over the next ten years before you decide to go through with the filing. It may be impossible for you to get a loan or credit card in the future if you file for bankruptcy.
Credit Cards
Make sure that you pay more than the minimum balance owed on all of your credit cards to improve your credit. Work on paying off credit cards that have the highest interest rates or high balances. This builds the positive credit history that creditors like to see.
You will be able to keep up with your bills, and get a good credit score. Late payments affect your credit report. Also late payments might prevent you from obtaining a loan should you need it in the future.
Attempts to defend negligence or bad credit will not succeed, even if they are justifiable. The creditors are only worried about results and numbers. It may even draw more attention to the blemish.
Do not use your credit cards. Do all of your spending with cash or debit cards. If you ever use a credit card, be sure to pay it all in full.
If you want to fix your credit it can seem like a lot to handle, if you work hard you can do it the right way. Use what you have read here to get back on track with your credit.
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