Millions of people live with bad credit as a result of negative financial impact from loss of employment, climbing cost of living, and the daily challenges of making ends meet. Luckily, these tricks and tips can show you how to have a better credit score.
You may be able to get a secured credit card even if your poor credit has prevented you from getting other credit cards. You will most likely be approved for this type of card, but you will have to add money to the card before you can use it so the bank will know that you can pay for all of your purchases. Responsible use of any credit card can help your credit rating. However, never forget that irresponsible use will get you in trouble every time.
When you have a good credit rating, you will be able to easily get a mortgage loan. 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. This is helpful in case you want to borrow money.
Never trust a business or person who offers to clear up your credit for a price. Especially if it is correct information they say they can remove. Unfortunately, this negative information stays on your credit record for at least seven years. It is possible to have erroneous information removed from your report, however.
Before you hire a credit counselor, make sure that you have done your research. Some credit counselors offer real help while others have more dubious things in mind. Some are not legitimate. It is wise for consumers to not give out personal information unless they are absolutely sure that the company is legit.
Avoid credit schemes that will get you in trouble. There are various online scams that involve creating a fresh credit file. That is illegal and you are going to be caught. They may seem like a small matter, but if you get caught, you could receive heavy fines and even jail time.
Joining a credit union is a great way to build your credit if you are having a difficult time doing so elsewhere. Credit unions may be able to offer more credit options or better rates than a larger bank, based on an understanding of the local area rather than the national situation.
If you come across a mistake on your credit report, don’t hesitate to dispute it. Send a letter to all agencies involved. Include the errors you noted along with supporting documents that prove that the information on file is erroneous. Send any correspondence by recorded mail to ensure proof of receipt by the agency.
Credit Card
The first step in credit repair is to close all but one of your credit accounts as soon as possible. Transfer credit card balances to one card for loan consolidation. By doing this, you can work towards completely paying off one credit card with a large debt, rather than working piecemeal with many smaller debts.
Take the time to ensure each month’s credit card bill is correct. If you spot any late fees, immediately contact your credit card company. This can save you from having late payments reported to the credit reporting agencies.
Avoid filing for bankruptcy. This negative mark will stay on your report for 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 for bankruptcy will make it very difficult for you to qualify for credit in the future.
Try and pay down any revolving account balances in order to boost your credit score. Simply lowering the balances on your open credit accounts can give quite a boost to your credit scores. The FICO system makes a note when your balances are at 20, 40, 60, 80, and 100 percent of your available credit.
Now you know how to repair your credit score, so get started on a plan of action. You should take action before your credit gets worst, at least to slow down the process.
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