Your credit can easily be damaged by careless shopping sprees, too many credit cards or by an unexpected financial emergency. If you’re one of the many people with credit problems, read on for some ways to improve your situation.
If you don’t have very good credit, financing your home may not be easy. If you do have poor credit, try to get a FHA loan because there is a guarantee that it will be given to you. FHA loans offer lower down payments and help with closing costs.
You may be able to get a secured credit card even if your poor credit has prevented you from getting other credit cards. These accounts are much easier to get as you will have to fund the new account ahead of time with a deposit to cover any purchases. If you use it correctly, a new card can help you fix your credit.
Pay down any credit cards with a balance in excess of 50%, preferably getting them down to 30%. If you have a balance that is more than 50 percent, your credit score will drop. If you can, pay the balances on your cards; if not, do your best to pay as much as possible each month.
With a good credit score, you can easily buy a house and mortgage it. Fulfilling your mortgage obligation in a timely fashion does a great deal of good for your credit rating. Owning a home shows financial stability, which is great for your credit. If you have to take out a loan, this will help you.
Any company or credit counselor that claims they can erase all negative reports from your credit history should be viewed with some skepticism. Unfortunately, this negative information stays on your credit record for at least seven years. Be aware, however, that incorrect information can indeed be erased from your record.
Give your credit card company a call and ask them to lower your credit limit. It will help to keep spending under control, and also sends a positive message to potential lenders. This means you might have a better opportunity of obtaining necessary loans in the future.
Don’t sign a debt settlement contract until you know what impact it is going to have on your credit score. Some debt settlement methods can hurt your credit even more, and you should be sure of how it will affect you. They do not care about the effects of what they do to your credit score and are just in it for the money.
The first step in repairing your credit involves a thorough and careful check to ensure your credit report doesn’t contain erroneous information. 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 you find a mistake on your credit report, be sure to dispute it! Send a dispute letter along with supporting documents to the credit agency that recorded the errors. Make sure that you ask for a return receipt so that you know your letter makes it to its intended destination.
You should get all terms and conditions in writing if you choose to deal with a creditor. The documentation you gain from the creditor is important in case the company changes ownership or the creditor is no longer interested in the deal. Once you make the final payment, get a statement that verifies that the debt has been satisfied and send it to the various credit reporting agencies.
Pay the balances on all credit cards as soon as you can to start the credit restoration process. It is a toss up as far as which cards are best to pay off first – some choose ones with the highest interest rate, others choose the card with the lowest balance. This builds the positive credit history that creditors like to see.
To increase your credit score lower the amount owed on revolving accounts. Paying off your balances will have a perceptible positive impact on your credit score. Your FICO credit score notes what your balances are on your revolving accounts based on the credit you have available.
Keep your credit cards in your wallet. Use cash to pay for things whenever possible. Any credit card purchases should be paid in full the same month of purchase. Do not carry a balance on your cards.
Restoring your credit rating looks at first like an uphill battle, but with sound effort and the right advice, that battle can be won. Use the information you have learned here to help get you started on the journey to a better credit score.