Debts that you may have forgotten about or been unaware of can seriously hurt your credit. Because of this, the time is now to manage your debt and mend your credit. To repair your credit, follow the following advice.
Getting a traditional home loan can be difficult, if not impossible, with imperfect credit. If possible, apply for an FHA loan; these loans are backed by the United States government. FHA loans can even work when someone lacks the funds for down payment or closing costs.
Credit Score
A lower credit score can get you a lower interest rate. This should make your monthly payments easier and allow you to pay off your debt much quicker. Receiving competitive credit rates and good offers are important in having credit that you can pay off easily, and that will get you a great credit score.
Improve your credit score, as well as make some profit, through an installment account. An installment account requires a monthly payment, make sure you can afford it. Keeping an installment account will help your credit score.
If credit score 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. Unfortunately, negative marks will stay on your record for seven years. You can erase information that is incorrect from your credit record.
Credit Card
Many credit card companies are willing to help customers by eliminated late fees or lowering monthly payment amounts. This prevents you from sinking further into debt or further damaging your credit score. Credit card agents may have the authority to eliminate monthly charges, extend your due date or change your billing cycle.
Contact your creditors and see if you can get them to lower your overall credit limit. 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.
Credit Report
You should examine any negative entries on your credit report thoroughly if you want to fix your credit problems. Even if the negative credit item itself is not erroneous, if any of the data pertaining to it is, then you may be possible to have it removed from your credit report.
If you come across a mistake on your credit report, don’t hesitate to dispute it. Draft a letter to reporting agencies disputing negative entries and also submit any available documentation. Make sure that you ask for a return receipt so that you know your letter makes it to its intended destination.
If you and your creditor decided to set up a payment plan, you should first get the details of the plan in written form. This way you have documentation of the agreement in case the creditor decides to change their mind or ownership of the company changes. Every time you get a debt paid off, ask the company to notify the credit bureaus.
Credit Card Balances
Begin the process of credit improvement by trying to pay down your credit card balances as fast as you can. First, pay down your credit card balances, starting with the highest interest. By doing this, you will show your creditors that you are trustworthy with your credit.
Making your payments on time shows lenders that you are serious about maintaining good credit. Every late credit card payment can damage your credit score.
Lowering the balances on any currently revolving accounts will increase your credit score. Maintaining smaller balances can improve your credit rating. The system that determines your credit score can recognize the percentage of credit you have that you are currently using.
When you create a new credit source, your score decreases. When you are offered a credit card when checking out at the store, fight the urge to get one to receive the discounts that are offered to you. Opening a new line credit line can immediately decrease your credit score.
Threats are illegal. If a collection agency is treating you roughly, you could sue them. Know the laws in your state that can protect you from illegal practices.
Get out of debt. When deciding how risky you are, lenders compare the whole amount of debt you owe to the amount of money you earn. You will be seen as a greater credit risk if your debt is too high in comparison with your income. Since it will likely take a while to get rid of your debts, write a plan for decreasing your debt gradually, and follow it.
Common Sense
This article shows that debt reduction and repairing credit simply takes common sense. If you follow some sound advice and use common sense, you can be on your way back to good credit.