Debts that you may have forgotten about or been unaware of can seriously hurt your credit. Now you must handle the crisis and fix your credit score. The following advice can help you easily repair your negative credit.
If you are buying a home it will not always be easy, and even more difficult if your credit is bad. FHA loans might be a good option to consider in these circumstances, as they are backed by our federal government. Even if an individual does not have money for the down payment to purchase real estate or pay closing costs, FHA loans may still work.
If you have credit cards where the balance is more than half of your credit limit, pay these down right away. Any balances that are over half your limit drag your credit rating down. So be sure to pay your credit card down or, if you can not, try to use another credit card.
Having a lower credit score can lower your interest rate. This should make your monthly payments easier and allow you to pay off your debt much quicker. Asking for a better deal from your debtors can help you get out of debt and back to achieving a better credit score.
If you find any errors on your credit reports, dispute them. Write a dispute letter to any agencies with recorded errors, and include supporting documents. Use a return receipt when you mail your package so that you can prove that the agency received it.
Always get a plan in writing if you are going to do a payment plan that deals with creditors. This will give you important documentation in case of an ownership change or if the creditor tries to back out of the agreement. Once it is paid off, you should get that in writing to send to the credit reporting agencies.
Avoid filing for bankruptcy. It can adversely affect your credit for up to 10 years. Bankruptcy may sound great because your debt goes away but there are consequences. If you choose to file bankruptcy, you’ll be unable to get a credit card or loan in the future.
Making your payments on time shows lenders that you are serious about maintaining good credit. Late payments to credit cards are reported to the major credit agencies and can hurt your chances for securing a new loan.
Credit Score
Lowering the balances on any currently revolving accounts will increase your credit score. By lowering your credit card balances, you will be able to improve your credit score. Your FICO credit score notes what your balances are on your revolving accounts based on the credit you have available.
Make sure the credit restoration agency you are working with is legitimate. The credit repair industry does have its fair share of agencies that do not live up to their promises. Slimy operators are quite common, so beware of credit score improvement scams. Always read reviews online first to find a good agency.
Although they mean a lot to you, these statements are often set aside when lenders go over your credit history. Inclusion of the defending statement could actually have the opposite effect as it brings more attention to the fact that you have a negative mark on your report.
Keep your credit cards in your wallet. Try to use cash when purchasing. Pay off any credit card purchases immediately.
It’s especially painful to have a lot of different debts that you can’t pay all at once. Take out a little money for each one of the creditors that you owe. Minimum payments will keep your debt accounts in good standing, and will keep them from ending up in collections.
As you are now aware from this article, common sense is the prevailing wind that will sail you to better credit scores. Following these simple steps and credit score repair will no longer be a distant dream.
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