If you have errors on your credit report, it can lower your credit score and make it hard for you to get new credit. Taking your poor credit situation into your own hands and doing something to make it better is generally considered best for getting you back on your feet again. Read on to find out how you can fix your credit.
If you have a poor credit rating, it can be extremely difficult to obtain a mortgage loan for a home. In this situation, it is a good idea to try to obtain an FHA loan, because these loans are guaranteed by the federal government. FHA loans even apply for someone who doesn’t have closing costs or the funds that are needed for down payment.
The first step to repairing your ailing credit is to create a manageable, feasible financial plan. You must make a commitment to making changes on how you spend money. Stick to the essentials, and avoid frivolous purchases at all costs. Consider if a purchase is both essential and affordable, and only purchase it if you can answer “yes” on both counts.
Credit Score
If you can’t get a normal card due to low credit score, look into a secured card. Most people are able to get this type of card, but you will have to load it up with a prepaid amount of money, as a guarantee that you can pay any charges that you make. If you get a new card and use it responsibly, it will help to improve your credit score.
Make sure that you are never using more than 50% of your credit card’s limit. Carrying a balance of more than half your credit limit negatively impacts your credit score. Either pay this balance down or spread it out over multiple cards.
By opening an installment account, it could help improve credit score and you could have a decent living. With this sort of an account, you need to keep a minimum. Handling an installment account correctly will help you improve your credit score in a short period of time.
If a company promises that they can remove all negative marks from a credit report, they are lying. Negative entries that are otherwise accurate will stay on your credit report for a minimum of seven years. It is true, however, that you can remove inaccurate information from your report, but you do not need the assistance of a consultant to do so.
Though it is an unsettling prospect, consider asking your credit card provider to reduce the amount of credit extended to you. This helps you from overspending and shows that you want to borrow responsibly and it will help you get credit easier in the future.
If you are trying to repair your credit, check all of your negative reports very carefully. 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.
Credit Unions
Credit unions are an option for those who have run out of options. Credit unions may be able to offer more credit options or better rates than a larger bank, based on an understanding of the local area rather than the national situation.
If you see errors on your credit reports, dispute them with the credit agency. Send a letter to all agencies involved. Include the errors you noted along with supporting documents that prove that the information on file is erroneous. Mail your dispute packet with receipt confirmation so you will have proof the agency has received it.
Take a look at credit card bills to make sure that every item is one you have charged. If there are late fees, you have to make sure that you take care of them immediately with the company so that they don’t send that information to the credit bureaus.
It is important to read all credit card statements you receive. Ensure that all of the listed charges are purchases that you made, keeping an eye out for fraudulent charges. You are the only one that can verify if everything on there is the way it should be.
Avoid using your credit cards. Stick to your budget by only spending the cash that you have allocated for spending. If you have a situation where you have to put a charge on your credit card, make a point to pay it off as soon as possible.
Collection Agency
Dealing with a debt collection agency is one of the most traumatic parts of a financial crisis. You can get a collection agency to cease and desist from harassing you but this does not discharge the debt. Letters such as these prevent calls from collections agencies, but the consumer must still pay the debts under dispute.
Come up with a way to pay off any existing unpaid debts. These things will still appear on a credit report, but they will be marked paid, which is better for your credit.
By now, you should be encouraged to know that there is much you can do to help repair your bad credit. If you use these tips, your credit score should increase quite a bit. Financial stability will be yours again, as you work hard to rebuild your own credit future.
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