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. Fortunately, there are quite a few ways that you can remedy your credit situation.
Having poor credit makes financing a home a nightmare. If possible, apply for an FHA loan; these loans are backed by the United States government. If you do not have a down payment or money for closing, consider a FHA loan
If you have credit cards with a balance that exceeds 50% of your credit limit, you must continue to pay on them until the balance is lower than 50% of the credit limit. Creditors like to see you using your accounts, but still keeping your balances under 50% of your allotted credit.
Good credit scores mean you can easily qualify for a home or car loan. Making regular mortgage payments will also help your credit score. Owning a home provides financial stability which is backed by your asset, the home, and as such, results in great credit. This will also be useful in the event that you end up needing to borrow funds.
If you want to avoid giving too much to your creditor, simply refuse to pay towards unfairly huge interest rates. Creditors are skirting aspects of the law when they hit you with high interest rates. However, you have entered into a legal agreement that requires you to pay accrued interest. You may wish to make a legal claim that the interest rate charged exceeded your state’s statutory limits.
When beginning your credit repair journey, remain wary of companies pledging to get negative credit report entries deleted, especially if those entries are accurate. Regardless of their claims, these debts will stay on your report for seven years at a minimum. But, you should remain mindful of the fact that errors can be deleted from your report.
Paying your bills is something you need to do to repair your credit. Not only must bills be paid, but they must also be paid in full and in a timely manner. Once you have started to pay towards your past-due accounts, you credit score will gradually improve.
When trying to repair your credit, research any credit counselors you consider using very thoroughly. Many counselors are honest and helpful, but others may be less interested in actually helping you. Some credit services are nothing more than fly-by-night scams. If you’re smart, you’ll make sure the credit counselor is not a phony first.
Give your credit card company a call and ask them to lower your credit limit. This is likely to keep you from overusing credit, which can be a financial burden. It also lets credit card companies know that you are responsible, and this makes them more likely to extend credit to you as time goes on.
Before going into debt settlement, find out how it will affect your credit score. There are ways to go about this that will have less of an impact and should be learned about before you make any kind of deal with a creditor. They are just out to get their money and do not care how that effects your credit score.
If you find a mistake on your credit report, be sure to dispute it! 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. Make sure when you send the dispute package that you request proof by signature that it was received.
Try to pay down all of your debts until you’re only carrying a balance on one. Make the minimum payment each month on your other accounts, but make the largest payment possible to the one account you are focusing on. This will let you focus on paying off a single account rather than many small ones.
If credit score improvement is something you have been considering, the first step would be to pay down your credit card balances. Pay down the cards with the largest balances and interest rates first. Creditors will see this action as a sign that you are responsible and educated.
This is to keep your credit in good standing. Whenever you fail to make your payments on time, your credit report is affected negatively. This can make it very difficult for you to take out a loan in the future.
With some instruction and some hard work you can help your credit get back where it needs to be, so don’t be fooled by how hard it may seem. Apply the advice from this article to start your march toward better credit score days.