Having credit problems is hard enough, but finding information on how to help fix your credit can be harder. We have outlined the best path to repairing your credit in this article just for you. Put the following tips into action, and you’ll start to see improvements.
If you need a credit card to aid in fixing your credit but you cannot obtain one due to the state of your credit, applying for a secured credit card is an option. You will most likely be approved for this type of card, but you will have to add money to the card before you can use it so the bank will know that you can pay for all of your purchases. If you use it correctly, a new card can help you fix your credit.
If your credit card is carrying more than half of its credit limit, your first priority should be paying it down until it is below 50%. If any of your balances climb past half of your available credit limit, pay them down or spread the debt around other accounts, otherwise, your credit rating gets tarnished.
If you credit score is good, you should have no problem purchasing a house and obtaining a mortgage. Making your mortgage payment on time each month will also boost your credit score. Owning a valuable asset like a house will improve your financial stability and make you appear more creditworthy. Financial stability is important should you need a loan.
Before you decide to go through with a debt settlement, you should be sure you know how it will affect your credit. Some methods are less damaging than others; research them all before making an agreement with your creditor. They do not worry about how your credit score looks; they want to get money.
If you find any errors on your credit report, you should dispute them. Draft a letter to reporting agencies disputing negative entries and also submit any available documentation. When you mail your dispute package, be sure to make arrangements for confirmation of receipt. In this way, you will have documentation that your information has been received.
Look through your credit card statement each month and make sure that it is correct. If such fees are present, you need to get in touch with the credit card company right away to avoid adverse action.
If you and your creditor decided to set up a payment plan, you should first get the details of the plan in written form. This is for your protection. It allows you to have valid documentation of the terms in the event that a creditor reneges on its offer or changes owners. As soon as you get it paid off, have that in writing so you are able to inform the credit reporting agencies.
If you want a higher credit rating, you will need to bring down the balance on any existing accounts. You can up your credit score by just keeping your balances lower. The FICO system notes when balances are at 100, 80, 60, 40 and 20 percent of your total credit available.
Credit card usage should be eliminated. Use cash to pay for things whenever possible. If you have to make a purchase with your card, pay it off right away.
When repairing your score, be cautious of law offices and lawyers that promise fixes for credit. Due to the huge amount of people with credit problems, lawyers have emerged and offer to repair credit for a huge fee, and most of the “repair” is illegal or useless. Do your research before calling any lawyer for their help.
Hopefully, the information in this article will be of use to you. Do not let your situation discourage you. Your efforts will eventually pay off. Be prepared to exercise patience. If you keep at it, you will have awesome credit again in no time.