There are many reasons why you may have a poor credit history. Credit cards could have been your primary means of support while you were gaining an education, a passion for shopping may have gotten the best of you or the decline in the economy might have left you jobless for a time. Luckily, there are some things you can do to make things better. Here are just a few of the ways you can do that.
Getting a traditional home loan can be difficult, if not impossible, with imperfect 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.
When you want to fix your credit, you need to start somewhere. Have a realistic plan and stay with it. Be totally committed to changing your spending habits. Be sure to buy only the things that you need. If you are buying something because you want it, and don’t need it, put it back on the shelf.
If you do not want to pay too much, contact your creditors and tell them you will not pay on a interest rate that is astronomical. It is important to know the terms of your original agreement for the debt you incurred. Usually if you agreed to the terms the terms will be upheld as legal. If you believe the charges are excessive and your debtor will not negotiate down the interest and other additional charges, state laws might provide you with additional avenues to pursue a reduction in these charges. Federal law provides that when you are billed by a collection company the fees and interest cannot exceed the amount of the original debt. You did sign a contract saying that you would pay off the debt. If you go ahead and sue your creditors, ask that they consider the high rate of interest.
As you work toward repairing your credit score, you should be willing to cooperate and work with your creditors. By doing this, you will keep your credit from getting worse by making sure that your debt does not increase. Don’t be afraid to ask for alterations in interest rates or dates of payment.
Consumers should carefully research credit counseling agencies before choosing one with which to work. Some counselors truly want to help you, while others are untrustworthy and have other motives. Some are simply fraudulent and are out to get your money. If you’re smart, you’ll make sure the credit counselor is not a phony first.
Before you decide to go through with a debt settlement, you should be sure you know how it will affect your credit. Do some heavy researching before starting an agreement with any creditor; there are other options that may not damage your credit score as heavily. Many collectors just want to get paid and don’t care about credit consequences.
One way to increase your credit score is to become a member at a credit union. These credit unions can probably give you better credit options in the long run.
Credit Card
In order to get a hold on your credit, focus on closing all accounts except one. Call your credit card company and try to work out a repayment plan, or transfer the balances of multiple cards to one lower interest card. You can pay down one credit card in full, rather than chipping away at many.
Get a written copy of any payment plan you negotiate with a creditor. This is for your protection. It allows you to have valid documentation of the terms in the event that a creditor reneges on its offer or changes owners. Upon completion of payment, make sure to get the receipt in writing and send it to the credit reporting agencies.
To even begin improving your credit you will need to lower the balance owed on them as soon as possible. Pay down the cards with the largest balances and interest rates first. This builds the positive credit history that creditors like to see.
Restoring your credit rating looks at first like an uphill battle, but with sound effort and the right advice, that battle can be won. Use the information in this article to boost your credit score.
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