Getting off track with your credit can have a negative impact on your life’s path. It can limit opportunities and deny you of financial options. But, you can fix your credit in a few simple steps and protect it for the future.
Getting home finance can be quite tough when your credit rating is not good. FHA loans are good options in these circumstances, because the federal government guarantees them. FHA loans are ideal for those who cannot afford the high down payment that most banks require.
If your credit is such that you cannot get a new card to help repair it, apply for a secured one. You will most likely be approved for this type of card, but you will have to add money to the card before you can use it so the bank will know that you can pay for all of your purchases. Responsible use of a credit card can help rebuild your credit.
If your credit card is carrying more than half of its credit limit, your first priority should be paying it down until it is below 50%. Creditors like to see you using your accounts, but still keeping your balances under 50% of your allotted credit.
Installment Account
Opening up an installment account will help you get a better credit score and make it easier for you to live. An installment account requires that you make a minimum payment each month. It is imperative that you only take an installment account that is affordable. If you are able to keep up with one of the accounts, you should see your credit score improving quickly.
If credit improvement is something you are investigating and a company has told you they can strike true, but negative, information off of your credit report, they are lying. All information remains on your credit report for a period of seven years or more. You can erase information that is incorrect from your credit record.
Consumers should carefully research credit counseling agencies before choosing one with which to work. Many may have ulterior motives, so make sure you are not being duped. Some are simply fraudulent and are out to get your money. Consumers should always check to see if a credit counselor is not a scam before deciding to use them.
Do not involve yourself in illegal activities. There are scams all over the web that teach you how to create a new credit file. These scams are not legal and there will be repercussions. Taking these short cuts will end up costing you money and could lead to a stay in jail.
Check any negative items on your reports carefully when you begin fixing 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.
Take the necessary steps to fix any mistakes that you see on your credit reports by filing an official dispute. Report any errors to the three credit reporting agencies. Be sure to include any documents to support your case. Mail your dispute packet with receipt confirmation so you will have proof the agency has received it.
Close all your credit cards except for one as a means of repairing your credit. It is important to make small payments or transfer a balance to the open account. In this manner, you can take care of all your credit card debt by paying down a single balance.
Make sure to review your credit card statement monthly to make sure there are no errors. If there are, you will need to contact the company immediately to avoid them reporting this to a credit reporting agency,
Credit Report
Paying your credit cards on time keeps you in good standing on your credit report. Late payments are reported to all credit report companies and will greatly decrease your chances of being eligible for a loan.
Lowering the balances on any currently revolving accounts will increase your credit score. Your credit score can be raised if you lower your balances. The FICO system will make a note when the balances are at 20, 40, 60, 80 and 100 percent of the total credit available.
Unfortunately, no financier is going to be interested in the statement you provide when they are examining your credit history. Do not draw more attention than needed to the bad marks on your report.
Credit Score Repair
If you are trying to fix your credit, be aware of lawyers who claim to instantly fix your credit. The state of the economy has caused many lawyers to practice unethical methods by promising credit score repair for a steep fee and not delivering. Do a thorough background check on any lawyer advertising credit score repair services before handing over any money.
Determine a way that you can settle all overdue accounts using affordable time payments. Though they will still be reflected on all three credit reports, they will show as paid so the ill effects are less substantial.
If you are having problems paying your monthly payments, contact your creditor and try to work out a payment plan. You may be able to defer some lines of credit, like federal student loans. You can refinance other loans, like vehicle loans. In any case, you want to protect your credit and creditors may be willing to work out a repayment plan with you. Another benefit of being proactive is that you can alleviate your financial burden and open up your ability to pay the bills on time that will not work with you on payments.
Begin paying off your debts now. Creditors will be sure to look at the correlation between your total debts versus your total income. If you have too much debt for your income, you are viewed as a poor credit risk. The majority of people will not be able to pay off debt in one swoop. Write regular payments into your budget until you can get it taken care of.
These tips will make a big difference in your fight against bad credit. Credit rating affects your life in many ways, so make sure to learn all you can about it.
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