Having poor credit means you might not get the results you want from companies that look at your credit. It makes it a lot harder to obtain loans and the ones that are available tend to carry high interest rates. It’s important to take steps to restore your credit so that you can have better financial opportunities. Follow these tips to repair your credit.
If you are buying a home it will not always be easy, and even more difficult if your credit is bad. An FHA loan can be helpful in such a case since the federal government backs these loans. You may even qualify for an FHA loan if you don’t have enough money for a down payment or the closing costs.
If your credit card has a balance of over 50% of your limit, it should be your number one priority to pay it off until the balance is under 50%. If your credit card balances exceed 50% of their limits, it will lower your credit score, so spread your debt over multiple cards, or better, pay down the balances.
For a credit score boost, an installment account will help. It is necessary to at least pay the minimum, so insure the account is something that you can pay. If you use these accounts, your score will go up rapidly.
Always do research before contracting a credit counselor. Some counselors truly want to help you, while others are untrustworthy and have other motives. You’ll find that other ones are just scams. A savvy consumer will always do his or her research on any credit counseling service to ensure that the agency is legitimate.
Call your credit card companies and request that they lower your limit on your cards. Not only can this tactic prevent you from getting yourself in over your head with debt, but it can also imply that you are responsible to those companies and to any future companies.
Before you get into an agreement about settling a debt, make sure you understand how it’s going to affect your overall credit. Some agreements won’t hurt you as much as others. This is why you should research all of the available ones for you before signing an agreement. Some debt settlement companies are only after profits and do not communicate the likely consequences of their methods.
If you are trying to repair your credit, check all of your negative reports very carefully. Any mistakes, such as in the amount owed or the date the agreement was entered, could result in the removal of the entire negative trade line on your credit report.
If your credit isn’t so hot, but you need new credit to demonstrate responsibility, then look up your local 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.
Bankruptcy should be filed only if absolutely necessary. This will reflect on your credit report for the next 10 years. It sounds very appealing to clear out your debt but in the long run you’re just hurting yourself. If you do file for bankruptcy, it will be extremely difficult to get approved for a loan or a credit card for many years, if ever.
When you start fixing your credit, pay down balances on the credit cards as soon as you can. You should first work on paying down the credit cards with the highest balance or interest rates. Your debt will not grow as fast as before, if you get rid of high interest rates first, and your creditors will see you are making efforts.
To keep your credit in good standing and get a better score, maintain a low balance on revolving accounts. Reducing the amount of debt you’re carrying is one of the best ways to improve your credit score. The FICO system notes when balances are at 100, 80, 60, 40 and 20 percent of your total credit available.
Lenders do not care about the reason you have negative information on your credit report. Having some positive credit history is the only way that negative reports can be counteracted when lenders are analyzing your credit liability. The statement will only draw further attention to negative reports on your credit history.
Give yourself more options in the marketplace by repairing your bad credit. You just need to know where to start and what you can do. Repairing your credit takes some discipline and a little time. Use the hints from this article and you will soon begin to fix your credit.