Being fully aware of past and current debt can help you control incurring new debt that cannot be managed. It is now time to perform crisis management and begin to boost your credit score. To repair your credit, follow the following advice.
Fha Loan
Getting a traditional home loan can be difficult, if not impossible, with imperfect credit. If this is the case, try to get an FHA loan, which are loans backed by federal government. You may even be able to secure your down payment and closing costs through an FHA loan. It depends on if you qualify.
If you have a card that carries a balance of over 50% of the limit, you should pay it down to below 50%. Your credit score can diminish with balances over 50%, so spread out the debt or pay off the credit cards.
Improve your credit score, as well as make some profit, through an installment account. Open an installment account that you can pay for and make sure to keep an affordable monthly minimum on it. A properly managed installment account will work wonders on your credit rating.
It is essential to pay all of your bills if you are looking to repair your credit. Pay these bills on time, and make sure you pay the full amounts owed. Your FICO score will begin to increase immediately after you pay the bills that are past due.
Do not do anything that will make you end up in jail. Don’t buy into scams that suggest you create new credit files. Creating a new credit file is very illegal and you can be easily caught. The legal proceedings will be costly, and you may even be sent to jail.
Credit Score
Don’t sign a debt settlement contract until you know what impact it is going to have on your credit score. Some methods are less damaging than others; research them all before making an agreement with your creditor. The credit companies are looking at their own bottom line and are not concerned with your credit score.
When attempting to improve your credit, you should go over any negative marks with a fine tooth comb. Even if a charge held against you is legitimate, any problems with its details, like the date or the amount owed, could make the entire entry invalid and eligible for removal.
Credit Union
Joining a credit union is a great way to build your credit if you are having a difficult time doing so elsewhere. You may find that the credit union has more options and better rates to offer you than banks will.
If you are able to get a payment plan worked out with any of your creditors, make sure you get the terms in writing. Having the plan in writing will protect you if the creditor reneges on the plan or if your debt is transferred to another creditor. Upon completion of payment, make sure to get the receipt in writing and send it to the credit reporting agencies.
This is the first step toward having an A+ credit rating. Every late credit card payment can damage your credit score.
Read every credit cart statement you receive in full. Errors are not as rare as you might think. Always check to make sure that you are being charged correctly, and not being double charged or charged for items that you did not buy. Take the reigns, and go over your monthly credit card statements. No one else will do it, it is your responsibility.
Our initial inclination is to defend ourselves, but in truth, lenders will not even glance at your defending statement. Do not draw more attention than needed to the bad marks on your report.
Keep your credit cards in your wallet. Purchase with cash. If you do pull out the credit card, pay off the debt in full each month.
Collection Agencies
The worst part of a credit crisis may be the collection agencies. Remember that when dealing with harassing collection agencies, consumers have the option to issue a cease and desist letter to stop the harassment. This will stop the calls from collection agencies, but that doesn’t mean consumers can keep ignoring the debt.
Do not trust anyone who promises you miracle results. 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. Check the reviews and reputation of any lawyer or credit repair firm thoroughly before you contact them and certainly before you give them any money.
Repairing your credit rating and cutting down your debt involves a lot more common sense than anything else. If you follow some sound advice and use common sense, you can be on your way back to good credit.