Whether you fell prey to the guys handing out credit cards like candy on campus, got carried away on one too many shopping sprees or got hit hard by the recent economic downturn, you probably did some damage to your credit. The following tips will help you take steps to begin to repair your credit.
If you don’t have very good credit, financing your home may not be easy. If this is the case, you can apply for a loan through the Federal Housing Administration (FHA). The credit requirements for these loans are more lenient than those of conventional lenders, and the federal government also guarantees the loans. FHA loans can even work when someone lacks the funds for down payment or closing costs.
Start by paying off credit cards with accounts 50% over your limit. You can concentrate on another card once these accounts are lowered to under half of your limit. If you have a balance that is more than 50 percent, your credit score will drop. If you can, pay the balances on your cards; if not, do your best to pay as much as possible each month.
Put the spending brakes on yourself by lowering your credit limit on all of your cards. Doing this keeps you from overtaxing yourself. It also shows the lending company that you are responsible.
Credit Score
Before you agree to settle your debt, you need to know how your credit will stand afterwards. Some agreements cause less damage to your credit score than others, and each should be considered prior to making an arrangement with a creditor. The creditor does not care what happens to your credit score, as long as they get their money.
When looking over your credit report, look closely at the negative report that are listed. While the credit item itself may not be in error, if you can find a mistake in the date, amount, or any other factor, you may be able to have the whole item removed from your report.
Try joining a credit union to begin a credit score. They may offer better rates and more credit due to local conditions as compared to national ones.
If you see errors on your credit reports, dispute them with the credit agency. Contact the credit agency in writing, with documentation to support the errors that you are disputing. Send your dispute package with a return receipt request so that you have proof that it was received by the agency.
Live within your means. You will need to change the way you think. Unfortunately, credit has been easier to get than ever. Many people are buying things that are unaffordable and end up paying more than they should for any item. Take a realistic look at your financial situation and determine how much you can actually spend.
One excellent way to get your credit score back up is to close all your credit cards except for one. You should arrange to make payments or make a balance transfer to your open account. Doing this will allow you to focus on paying off one large credit card bill, instead of several smaller ones.
If you work out a payment plan with a creditor, you should make sure to get the plan in writing. Any plan that you agree on should be put in writing and signed by both parties to protect you in the future. Once you finish making all your payments, be sure to send that information to the credit agencies in writing.
Filing for bankruptcy is a bad idea. The record of the bankruptcy appears on your report and affects your credit rating for up to 10 years. It sounds very appealing to clear out your debt but in the long run you’re just hurting yourself. It may be impossible for you to get a loan or credit card in the future if you file for bankruptcy.
If you need to repair your credit score, you should pay your credit card balances as fast as possible. You should first work on paying down the credit cards with the highest balance or interest rates. This builds the positive credit history that creditors like to see.
Credit Repair
Make sure the credit repair agency you are working with is legitimate. There are lots of disreputable credit score repair agencies out there. Sadly, many people have fallen for credit repair scams. Reading online reviews will help you to choose a decent credit improvement company.
With some instruction and some hard work you can help your credit get back where it needs to be, so don’t be fooled by how hard it may seem. Use the information you have learned here to help get you started on the journey to a better credit score.
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