Having poor credit can be a devastating occurrence in life. Bad credit makes it difficult to take advantage of any financial opportunities that arise. But, you can fix your credit in a few simple steps and protect it for the future.
If your credit is not perfect, getting a mortgage can be tricky. FHA loans are good options in these circumstances, because the federal government guarantees them. You may even be able to secure your down payment and closing costs through an FHA loan. It depends on if you qualify.
Planning is the first step to repairing your credit. Make a commitment to making better financial decisions. Only buy what you absolutely need. Only buy something if you have to have it and you can afford it.
Credit Report
When beginning your credit restoration journey, remain wary of companies pledging to get negative credit report entries deleted, especially if those entries are accurate. Negative credit information remains on your record for up to seven years. You should know that mistakes and anything incorrect can be removed from your credit report.
When trying to rehabilitate your credit, it is important to work with each credit card company you are indebted to. This will assure them that you want to handle your debt and keep you from getting even further behind. You can accomplish this by simply calling and asking them to change payment terms, like your interest rate or your billing date.
Credit counselors should always be researched thoroughly before being consulted for credit score improvement. There are some legit counselors, and there are some that have ulterior motives. Other options are clearly scams. To help protect yourself from fraud, investigate any credit counselors. One way to check an agency out is to check with the Better Business Bureau.
Put the spending brakes on yourself by lowering your credit limit on all of your cards. You will not be able to spend too much and they will see that you are responsible.
Read your negative reports carefully when attempting to rebuild your credit. The debt itself may be legitimate, but if you find errors in its metadata (e.g. the date, amount, creditor name), you might be able to get the whole entry deleted.
If you find any errors on your credit report, you should dispute them. A dispute letter should be sent to any of the agencies that are reporting the error. Be sure to include supporting documents. Sending your letter by certified mail provides you with proof that the letter was received.
If you are able to negotiate a repayment plan with your creditor, be sure to get it in writing. This will protect you should the company change its policies. Finally, when it is paid in full, get documentation thereof to submit to credit agencies.
Do not file for bankruptcy. Bankruptcies appear on credit reports for ten years. Bankruptcy not only zeros out your debt, it also zeros out your credit score. You may never get a line of credit for any purchases you might need to make if you go ahead, give up on repairing your credit and file for bankruptcy.
In order to start repairing your credit, you should try to pay down the balances on your credit cards as quickly as possible. Pay off high-interest debt first, as it grows the fastest. It is your job to turn it around and prove your responsible with credit.
Easy tips, like the ones in this article, will help you repair your credit and keep it healthy in the future. Having a good credit score is crucial to getting the best interest rates possible and is definitely worth the effort.
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