Bad credit affects every financial transaction you make. You have doubtless experienced the downside of a low credit score. In this economy, many people find their credit score plummeting. Use some basic credit repair tips to bring your score up.
If you don’t have very good credit, financing your home may not be easy. If you are in this situation you should look into FHA loans before speaking with a bank. FHA loans can even work when someone lacks the funds for down payment or closing costs.
The first step in credit score improvement is to build a plan. You have to be committed to making real changes to your spending habits. Only purchase something if you cannot live without it. Consider if a purchase is both essential and affordable, and only purchase it if you can answer “yes” on both counts.
Secured Credit Card
You may be able to get a secured credit card even if your poor credit has prevented you from getting other credit cards. Secured credit card applications have a high rate of approval because you must fund a security deposit against your credit limit. If you use it correctly, a new card can help you fix your credit.
When you have a good credit rating, you will be able to easily get a mortgage loan. You will get a better credit score by paying your mortgage payment on time. Owning a home is a great thing to have to help with your credit score. The house secures your finances and adds to your assets. This will be very helpful if the time comes where you need to take out a loan.
When trying to rehabilitate your credit, it is important to work with each credit card company you are indebted to. If you do this you’ll find that your debt doesn’t increase and your credit is improved. This can be accomplished by negotiating with them for a change in due date or monthly charges.
Make sure you research a credit counselor before you visit them. There are a lot of unscrupulous agencies scattered in among the few legitimate credit counselors that are really there to help you. Some are just people trying to scam you. A savvy consumer will always do his or her research on any credit counseling service to ensure that the agency is legitimate.
If your credit is poor, take the first step to repairing it by closing out the majority of your cards, leaving yourself just one to use. You may be able to transfer balances to your remaining account. This will let you focus on paying off a single account rather than many small ones.
Make sure to review your credit card statement monthly to make sure there are no errors. You must get in touch with your credit card issuer as soon as you spot an error to make sure that it is properly handled and does not result in any negative reporting.
Many times you and your creditor can work together to come up with a prepayment plan. If so, be sure you get a written agreement stating the terms. Having the plan in writing will protect you if the creditor reneges on the plan or if your debt is transferred to another creditor. Every time you get a debt paid off, ask the company to notify the credit bureaus.
Try not to file for bankruptcy. This will reflect on your credit report for the next 10 years. It can be tempting to just go ahead and file bankruptcy to get out from under the debt, but the detrimental effects can be long lasting. Filing bankruptcy makes it difficult if not impossible to get anything involving credit, like credit cards and loans, in the future.
This is to keep your credit in good standing. Every late credit card payment can damage your credit score.
Make sure the credit restoration agency is reputable. The credit improvement industry does have its fair share of agencies that do not live up to their promises. Sadly, many people have fallen for credit repair scams. Read reviews online to help you choose the right agency for you.
Although they mean a lot to you, these statements are often set aside when lenders go over your credit history. It can actually backfire. It brings attention to a part of your report you would rather a lender not look at very closely.
Debt collectors hounding you can be very stressful. Cease and desist instructions can be used to ward off debt collectors to a point, but only really to prevent harassment. Sending the letter does not mean you no longer have to pay the bill, it only stops the collection agency from calling.
If a poor credit rating has left you feeling discouraged, turn your situation around by applying the guidelines you have just read. These tips can stop your score from plummeting and help it increase.