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. Luckily, there here are some steps that you can take to turn things around.
Getting home financing is no small feat, especially if your credit score is less than perfect. Look into alternative financing options like FHA loans. You may even be able to secure your down payment and closing costs through an FHA loan. It depends on if you qualify.
Credit Card
If your credit does not allow you to obtain new credit, getting a secured one is much easier and will help fix your credit. When you open a secured credit card account, you place money on deposit to cover any charges you may make. This ensures in advance that you will have enough money to pay for your debt. Responsible use of a credit card can help rebuild your credit.
It is easy to get a mortgage for a house if your credit score is good. Fulfilling your mortgage obligation in a timely fashion does a great deal of good for your credit rating. Once you own a home, you will have financial stability secured by your assets, thus a good credit score. This will be useful in case you need to borrow money.
Credit Score
For a credit score boost, an installment account will help. With this sort of an account, you need to keep a minimum. If you can manage one of these accounts, your credit score should improve quickly.
Avoid paying off high interest rates so that you don’t pay too much. There are legal limits set in place to control the amount of interest a creditor is allowed to charge you, plus your original debt is all the credit card company paid when you made the purchase. Your initial agreement likely included a commitment to pay interest. If you decide to sue your creditors, you should be able to have the interest rates recognized as too high.
Legitimate negative credit problems can not be easily wiped away from your credit rating, so be wary of companies that promise they can do so. Bad marks on your report will not go away for seven years. You should know that mistakes and anything incorrect can be removed from your credit report.
Before using a credit counselor, it’s important to research them completely. Some counselors truly want to help you, while others are untrustworthy and have other motives. Some credit services are nothing more than fly-by-night scams. To help protect yourself from fraud, investigate any credit counselors. One way to check an agency out is to check with the Better Business Bureau.
Credit Report
The first step in repairing your credit involves a thorough and careful check to ensure your credit report doesn’t contain erroneous information. Even if the item itself is correct, any small mistake in the item, such as an inaccurate date or amount, may let you have the whole thing taken off your credit report.
If a creditor agrees to give you a payment plan, get that payment plan in writing. This way you have documentation of the agreement in case the creditor decides to change their mind or ownership of the company changes. After you have paid your debt, request appropriate documentation that confirms your zero balance.
Do everything you can to avoid filing bankruptcy. Bankruptcy can make getting credit almost impossible for many years. It sounds very appealing to clear out your debt but in the long run you’re just hurting yourself. It could be near impossible to receive a credit card or loan if you have filed for bankruptcy.
Fixing your damaged credit may seem like an overwhelming task in the beginning, but with a bit of work and a bit of guidance, you can turn things around and get your credit back on track. Take the advice that has been provided in this article to start making positive steps toward better credit.
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