Having a bad credit rating can seriously delay your goals in life. It can rob you of your financial options and prevent you from taking advantage of great opportunities. Here are a few steps you can take to restore and protect your credit score.
If you don’t have very good credit, financing your home may not be easy. An FHA loan can be helpful in such a case since the federal government backs these loans. You may even qualify for an FHA loan if you don’t have enough money for a down payment or the closing costs.
The first step in repairing your credit is figuring out a plan that works for you, and sticking with it. Unfortunately, the way that you approach spending money will probably have to be revamped. Only buy the things that are absolutely necessary. Ask yourself whether every purchase is both affordable and necessary, and only buy if the answer to both questions is “yes”.
Credit Score
You can reduce your interest rate by maintaining a high credit score. Doing this can reduce monthly payments, which will assist you in paying off any outstanding debts faster. Quickly paying off your debts is a good way to improve your credit score. This will give you access to more competitive rates in the future.
When trying to rehabilitate your credit, it is important to work with each credit card company you are indebted to. If you do this you’ll find that your debt doesn’t increase and your credit is improved. Talk to the company and see if you can change your due date or monthly fees.
Credit counselors should always be researched thoroughly before being consulted for credit repair. Many counselors are on the up-and-up and are truly helpful. Others just want to take money from you. Others are outright scams. Smart consumers make sure that a credit counselor is legit before starting to exchange any money or sensitive information.
Do not try something that you do not know is legal or illegal. The Internet is rife with many scams that will go into detail about creating yourself a brand new credit file and making the old one magically disappear. Doing this is illegal, and you will be caught. Legal repercussions will cost you a lot of money, and you could go to jail.
Credit Score
Know how debt settlements will influence your credit score prior to making a decision. You should know all about the methods you can use if you are going to enter into an agreement with someone. They do not care about the effects of what they do to your credit score and are just in it for the money.
If you find any errors in your credit reports, you should dispute them. Gather all supporting documents and any errors you find, and send them with a letter to the credit reporting agencies. Your letter should be sent with a request for return receipt, so you can have a record that it was received by the reporting agency.
Bankruptcy should be filed only if absolutely necessary. It can adversely affect your credit for up to 10 years. It can be tempting to just go ahead and file bankruptcy to get out from under the debt, but the detrimental effects can be long lasting. You may not qualify for auto financing or a credit card after filing for bankruptcy protection.
Credit Report
Paying your credit cards on time keeps you in good standing on your credit report. Each late payment that you make shows on your personal credit report and can hurt you when the time comes to take out a loan.
There are many credit repair agencies advertised; you must check with places like the Better Business Bureau to make sure that you deal with a reputable one. There are a lot of credit score repair agencies that you will want to avoid. Far too many people have been bilked by dishonest agencies. Always read reviews online first to find a good agency.
One of the most nerve-racking aspects of being in debt, and having bad credit, is dealing with collection agencies. You can submit a cease and desist statement to a creditor to stop harassment. Letters such as these prevent calls from collections agencies, but the consumer must still pay the debts under dispute.
Be wary of any company that tells you they can instantly fix your credit. A lot of people are having difficulty with their credit, and there are lawyers that try to exploit these people with illegal and ineffective credit repair services. Research any lawyer who claims to help repair credit before getting in touch with them for help.
Simple tips like these will help you fix your credit problems and keep your credit healthy. A high credit rating is essential for most people, so learning about repairing your credit is hardly a waste of time.
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