Having a bad credit rating can seriously delay your goals in life. It can make you feel like you are in debtors’ prison with no hope of escape. You can, however, fix your credit problems and have a brighter future.
Financing a home can be difficult if you have bad credit. Federally guaranteed loans (FHA loans) may be an option. Even if the applicant does not have money for closing costs or a down payment, an FHA loan is workable.
Creating a payment plan and sticking with it is just the first step to getting your credit on the road to repair. You need to make a commitment to changing your spending habits. Just buy what you need, and forget unnecessary purchases. If you are buying something because you want it, and don’t need it, put it back on the shelf.
Credit Card
If you have a poor credit history and can’t qualify for a credit card, get a secured card. Most likely, you will not have a problem obtaining this type of card, but you must add funds to the account before you make any purchases to assure the bank that you will pay. Using this new credit card in a responsible manner will help to build back up your good credit rating.
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%. When balances are over 50%, your credit rating goes down significantly, so try to either spread out your debt or, ideally, pay off your credit cards.
No credit score repair company can remove factual information, no matter how damaging, from your credit report. This information can stay on your record for about seven years. If there is incorrect, negative information, you can get it removed.
It’s vital that you actually begin paying the bills that you have if you want to improve your credit. More specifically, pay them on time and in full. Your credit rating will quickly rise as you settle up your overdue bills.
Before you choose a credit counseling agency, find out more about them. There are some counselors that are real, while others are basically scammers. Some are simply fraudulent and are out to get your money. It is smart to verify the legitimacy of credit counselors prior to getting involved with them.
Don’t get involved in anything that could get you arrested. There are schemes online that will show you how to establish an additional credit file. That is illegal and you are going to be caught. In addition to the possibility of facing jail time, you could be fined, your attorney bills may be substantial, and your reputation could be ruined.
Give your credit card company a call and ask them to lower the limit on your credit card. This will help you accomplish three things: 1. You will avoid being overextended. 2. Credit card companies will begin to view you as responsible. 3. It will be easier for you to get credit as time passes.
Credit Score
Know how debt settlements will influence your credit score prior to making a decision. Some agreements won’t hurt you as much as others. This is why you should research all of the available ones for you before signing an agreement. They do not worry about how your credit score looks; they want to get money.
If you and a creditor agree on a payment plan, make sure the agreement is committed to paper. This is the only way that you have of protecting yourself. When you pay it off, send a written copy of proof of payment to all three credit reporting agencies.
Do not file for bankruptcy. Bankruptcy will be noted on the credit report for 10 years, afterwards you must rebuild from scratch. It may seem like the right things to do, but your future will be affected. It could be near impossible to receive a credit card or loan if you have filed for bankruptcy.
Carefully read the small print on your statements. You want to double check that all the charges are accurate, and that you are not paying for something you did not purchase. If an error occurs, you should immediately notify your creditor.
Credit Restoration
There are many credit restoration agencies advertised; you must check with places like the Better Business Bureau to make sure that you deal with a reputable one. As with most industries nowadays, there are a number of shady companies offering credit restoration. There are many people who have been the victim of a credit restoration scam. See if the company in question has a reputation on any of the user review sites before you commence business with them.
Attempts to defend negligence or bad credit will not succeed, even if they are justifiable. The creditors are only worried about results and numbers. 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.
You may get into the situation that you have multiple debts and you just don’t have enough money to pay them all. Divide your money between your creditors so every one gets paid. Making payments, even just minimum ones, will prevent your debts from going into collection.
Your credit rating will also suffer from opening new lines of credit. It may be tempting to get a new account when there are bonuses offered at the check out, but you should stop and think about it first. Opening a new line credit line can immediately decrease your credit score.
A few easy steps, like the ones here, can help you repair your problems with credit and help you to maintain a healthy credit score. Time learning how to repair your credit, means a great future with many transactions since you will have a good score.
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