Bad credit is a particularly troublesome life problem that can haunt you for years. It can leave you with less financial options and worse opportunities. But, you can fix your credit in a few simple steps and protect it for the future.
Having poor credit makes financing a home a nightmare. An FHA loan can be helpful in such a case since the federal government backs these loans. FHA loans can even work when someone lacks the funds for down payment or closing costs.
The first step to repairing your ailing credit is to create a manageable, feasible financial plan. You must be dedicated to making some significant changes in the way you spend your money. You should only purchase the necessities, and skip the impulse buying. Before you open your wallet ask the questions “do I need this?” and “can I afford this?” If the answer is no to either, put it back on the shelf.
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. Most likely, a secured credit card will be easy for you to get, but you have to fund the credit account before you purchase so the bank knows that you won’t miss any payments. A responsibly used new credit card will begin healing your credit score.
If you have credit cards where the balance is more than half of your credit limit, pay these down right away. When your debt is over 50%, credit ratings usually go down. With that said, try to spread out the debt that you have or try paying it off.
When starting to repair your credit, pay your bill on time from now on. You can’t just pay whatever you want whenever you want. You need to pay your entire balance when it’s due. You will notice how quickly your credit score increases when you start paying off those overdue bills.
Many credit card companies are willing to help customers by eliminated late fees or lowering monthly payment amounts. If you do this you will not go into debt more and make your situation worse than it was. Contact your credit card company and request to change your scheduled due date or interest rate.
Do not do anything that will make you end up in jail. There are schemes online that will show you how to establish an additional credit file. These scams are not legal and there will be repercussions. They may seem like a small matter, but if you get caught, you could receive heavy fines and even jail time.
Find out how your debt settlement contract will make your credit score look. Do some heavy researching before starting an agreement with any creditor; there are other options that may not damage your credit score as heavily. They do not care about the effects of what they do to your credit score and are just in it for the money.
Make sure you review all of the negative marks against you on your credit report. The item may be essentially correct, but there may be an error someplace. If the date or amount, or some other thing is incorrect it may be possible to get the entire item removed.
Find and challenge errors on your credit report using the dispute process offered by each credit reporting agency. Write a dispute letter to any agencies with recorded errors, and include supporting documents. Use a return receipt when you mail your package so that you can prove that the agency received it.
These tips will make a big difference in your fight against bad credit. Good credit is important, so it’s important that you learn a great deal about credit improvement.