Is Your Credit Bad? You Can Fix It
Bad credit can hurt your life in many ways. Bad credit makes it harder to get any type of loan including for a car or house. Simple things like forgetting to pay a bill or ignoring a fee can lower a credit score. This article will give you tips for improving an imperfect credit score.
Getting a traditional home loan can be difficult, if not impossible, with imperfect credit. There is, however, alternative types of funding available that are offered by the banks. FHA and USDA are two such agencies who offer finance to those with lower credit scores, sometimes with low down payment and closing cost clauses. FHA loans are a good option regardless of your down payment amount or funds available for closing costs.
Make sure that you are never using more than 50% of your credit card’s limit. Creditors like to see you using your accounts, but still keeping your balances under 50% of your allotted credit.
Having a good record allow you to qualify for things like a home mortgage. Making regular mortgage payments will also help your credit score. Home ownership demonstrates that you have financial stability because they are secured by a valuable asset, and this results in a raised credit score. This will also be useful in the event that you end up needing to borrow funds.
If you make a decent income, consider an installment account when you want to give your credit score a boost. An installment account requires a monthly payment, make sure you can afford it. Handling an installment account correctly will help you improve your credit score in a short period of time.
Repairing your credit is actually pretty simple. The first step is to focus on paying your late bills. To help your credit, you should be paying the full amount owed within the time allowed. Your FICO score will begin to increase immediately after you pay the bills that are past due.
Always do research before contracting a credit counselor. The industry is rife with fraud and people with ulterior motives, so finding a legitimate credit counselor can be challenging. Some are not legitimate. It is smart to verify the legitimacy of credit counselors prior to getting involved with them.
If an action can result in imprisonment, draw the line. The web is full of scams that show you how you can craft a deceptive credit file. Do not think that you can get away with illegal actions. The legal consequences are expensive, and you might be sentenced to jail.
If you’re trying to fix your credit, be sure to check all your negative reports 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 you find any errors in your credit reports, you should dispute them. Contact the credit agency in writing, with documentation to support the errors that you are disputing. Include a request for a return receipt with the dispute package so that you can prove it was received by the appropriate agency.
Shut off all but one credit card if you want to fix your credit. Make the minimum payment each month on your other accounts, but make the largest payment possible to the one account you are focusing on. This will let you focus on paying off a single account rather than many small ones.
If you want to send your children to college, or need a simple loan, your credit score matters. If you are buried under a mountain of debt and have poor credit as a result, you can crawl out of that hole using the following tips.