Due to the state of economy, it is no surprise that so many people have bad credit scores. The tips in this article will help you learn how to boost your credit score.
Getting home finance can be quite tough when your credit rating is not good. If you are in this situation you should look into FHA loans before speaking with a bank. Even if the applicant does not have money for closing costs or a down payment, an FHA loan is workable.
Credit Card
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. When you open a secured credit card account, you place money on deposit to cover any charges you may make. This ensures in advance that you will have enough money to pay for your debt. If you get a new card and use it responsibly, it will help to improve your credit score.
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. Credit card balances are among the factors taken into account when determining your credit score. Maintaining balances over 50% will lower your rating. You can attain lower your balances by using balance transfers to move debt from accounts with higher balances to those with lower balances, or by simply paying off some of your higher balances.
You need to work with the companies from whom you have credit cards. This will enable you to make sure to keep your credit in good standing and repair any damage that may have been caused. Do not be afraid to call your credit card company and ask if you can make changes to your due date or your minimum payment amounts.
Before you hire a credit counselor, make sure that you have done your research. While there are lots of counselors with your best interest at heart, there are others who just want your money. Others are outright scams. A wise consumer will find out if the credit counselors they deal with are legitimate or not.
Ask credit companies to lower all of your card limits. Doing this keeps you from overtaxing yourself. It also shows the lending company that you are responsible.
If you are doing hardcore credit score improvement, you need to scrutinize your report for negative entries. Although a certain credit item may not have any error, finding a mistake corresponding to a date or an amount can have the same item taken out of your report.
If you are attempting to raise your score with the credit bureaus, but are encountering road blocks whenever you apply for new credit, then open an account with a credit union. 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.
Credit Reporting
Find and challenge errors on your credit report using the dispute process offered by each credit reporting agency. Report any errors to the three credit reporting agencies. Be sure to include any documents to support your case. Make sure that you ask for a return receipt so that you know your letter makes it to its intended destination.
Do not live beyond your means. You need to change your way of thinking in this regard. If you’re buying flashy items to boost your reputation, consider that a smart person who isn’t being chased by collectors will have an even better reputation! You should look at what you can afford to spend, before using credit for purchases.
Do everything possible to avoid bankruptcy. Filing bankruptcy negative effects your credit score for 10 years. It might seem like a good thing but you will be affected down the line. Once you have filed for bankruptcy, it may become very difficult to secure a loan or open a new credit account.
If you are late with your payment, your credit status will suffer. Late payments to credit cards are reported to the major credit agencies and can hurt your chances for securing a new loan.
Go through all the statements you receive. You want to double check that all the charges are accurate, and that you are not paying for something you did not purchase. It is only your responsibility to make sure everything is correct and error free.
To keep your credit in good standing and get a better score, maintain a low balance on revolving accounts. You can up your credit score by just keeping your balances lower. When balances reach anywhere from 20-100% of your available credit balances (in 20% intervals), the FICO system will make a note.
Now that you know how to improve your credit score, why wait? Act now to start on the road to improving your life by improving your credit.
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