When your credit report has problems, you have problems. It is much more frustrating when you’re reminded of bad decisions you made in the past. Rebuilding credit may be challenging, but it is not impossible. These tips should be able to help you.
If you don’t have very good credit, financing your home may not be easy. FHA loans might be a good option to consider in these circumstances, as they are backed by our federal government. FHA loans are a good option regardless of your down payment amount or funds available for closing costs.
Credit Score
Having a good record allow you to qualify for things like a home mortgage. By paying off your mortgage on time, you will even improve your credit score further. Owning a home provides financial stability which is backed by your asset, the home, and as such, results in great credit. Having a good credit score is important if you need to take out a loan.
To improve your credit rating, set up an installment account. You have to keep a monthly minimum on an installment account, so make sure you open an account that you can afford. Your FICO score will rise over time, if you responsibly manage this type of account.
No credit repair company can remove factual information, no matter how damaging, from your credit report. If the information is correct, it will remain as part of your report, in most cases, for seven years. It is possible, however, to remove errant information.
Before you choose a credit counseling agency, find out more about them. There are some counselors that are real, while others are basically scammers. Some are just people trying to scam you. A wise consumer will find out if the credit counselors they deal with are legitimate or not.
Don’t risk prison. There are various online scams that involve creating a fresh credit file. Do not attempt this because it’s illegal; you will not be able to avoid getting caught. You could end up owing a great deal of money or even facing jail time.
You can contact your creditors and request a lower limit. Not only will this prevent you from owing more, but it will be reflected in your credit score because it shows that you are responsible with your credit.
One way to increase your credit score is to become a member at a credit union. They might be able to provide you with several more options at better rates than banks, since they work locally as opposed to nationally.
Credit Card
In order to start repairing your credit, you should close all but one of your credit card accounts. You should plan on how you will pay the remaining open balances, or how to consolidate them into one account. Instead of paying several smaller credit card bills, you can work to pay off one credit card.
Carefully check all charges on your monthly credit card statement for errors. If you notice unwarranted fees or surcharges, contact the credit card company to avoid being reported for failure to pay.
If you wheel and deal and get a new payment plan, be certain to have it on paper. This will give you important documentation in case of an ownership change or if the creditor tries to back out of the agreement. You also want it in writing if it gets paid off so you can go ahead and send it to credit reporting agencies.
This advice can make a big difference in your credit score. Because you are rewriting your credit report, you need to be consistent in making all of your payments. Fixing a credit problem is far from impossible, and the faster you get to it, the better your results will be.