You have most likely done damage to your credit, whether you got a card from friends, went on too many shopping trips or were hit by economic pressures. Read on to learn about some basic procedures that can help you get out of your personal credit crunch.
Getting money for a home loan can be difficult, particularly when your credit is less than perfect. There is, however, alternative types of funding available that are offered by the banks. FHA and USDA are two such agencies who offer finance to those with lower credit scores, sometimes with low down payment and closing cost clauses. FHA loans are ideal for those who cannot afford the high down payment that most banks require.
When your credit is so bad that you can’t get a ‘regular’ credit card, a secured one will help you to repair your credit. These types of credit cards often require a good faith deposit to open a new account. If you show a good history of payments with this card, it will help improve your credit standing.
Installment Account
To improve your credit rating, set up an installment account. An installment account requires that you make a minimum payment each month. It is imperative that you only take an installment account that is affordable. If these accounts are properly managed, they can provide a quick boost to your credit score.
If you find that you have a credit card and the interest rate has gotten to high, you do have the option to not pay the debt, though there will be consequences. You may be able to challenge an interest rate that is extremely high. However, you have entered into a legal agreement that requires you to pay accrued interest. The only way you are legally able to sue the creditors is if you are able to prove that your interest rates are much too high.
You must pay your bills consistently if you want to repair your credit. However, it’s not enough to just pay your bills; you need to make your payments on time and in full. Your credit rating will quickly rise as you settle up your overdue bills.
Call your credit card companies and request that they lower your limit on your cards. This will prevent overextending yourself and lets the company know about your responsible borrowing habits. You could get credit easier in the future.
If you are doing hardcore credit score improvement, you need to scrutinize your report for negative entries. Even though the particular credit item may not accurate, finding an error in the amount, date, or something else can cause the entire item to be stricken from your report.
Anything on your credit report that you feel is inaccurate should be disputed. Draft a letter to reporting agencies disputing negative entries and also submit any available documentation. Mail your dispute packet with receipt confirmation so you will have proof the agency has received it.
If you are able to successfully negotiate a payment schedule for a debt, it is important to request a copy of the agreement in writing. If the creditor tries to change the agreement or if it the company is sold to someone else, you will have documentation to support your case. You also want it in writing if it gets paid off so you can go ahead and send it to credit reporting agencies.
If at all possible, avoid filing bankruptcy. The fact that you filed for bankruptcy is noted in your credit report and will stay there for 10 years. Though the idea of ridding yourself of debt can sound appealing, the long term consequences just aren’t worth it. It could be near impossible to receive a credit card or loan if you have filed for bankruptcy.
Doing this will ensure a good credit score. Late payments are reported to all credit report companies and will greatly decrease your chances of being eligible for a loan.
Collection Agencies
When you are having trouble paying your bills, debt collection agencies will start contacting you demanding payment. Remember that when dealing with harassing collection agencies, consumers have the option to issue a cease and desist letter to stop the harassment. They can prevent collectors from continuing to call a debtor, but they do not excuse the debtor from his or her outstanding financial obligations.
It is illegal for debt collectors or companies to threaten you. If this happens, be sure to document it. You need to know what the laws are that protect your rights as a consumer.
Although it can seem daunting, you can get your credit on the mend by learning about it and taking the proper steps. With the tips above, you are better prepared to take action and get your credit situation back where it should be.
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