Are you struggling because you have bad credit? Many people see that their credit scores are dropping in this economy. You can make your credit score better by following the tips in this article.
Financing a new home can be a challenge, especially if you have a history of bad 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. You may even qualify for an FHA loan if you don’t have enough money for a down payment or the closing costs.
Planning is the first step to repairing your credit. You must make a commitment to making changes on how you spend money. Avoid buying what you don’t need. Ensure that you can afford everything you buy and that you really need it.
Regular Card
If you are unable to get a new card because of your bad credit, try to apply for secured cards. These are extremely easy to qualify for. A secured credit card looks just like a regular card, and works like a regular card, but you have to have the necessary money in an account to guarantee payment. Using this card responsibly will improve your credit rating over time, and eventually you’ll be able to get a normal credit card again.
Any company or credit counselor that claims they can erase all negative reports from your credit history should be viewed with some skepticism. Negative entries on your record stick around for a term of seven years at a minimum, even if you take care of the debts involved. It is possible to have erroneous information removed from your report, however.
An important tip to consider when working to repair your credit is to work closely with your credit card companies. This will assure them that you want to handle your debt and keep you from getting even further behind. You can do this by speaking with them and asking to change the monthly charges or due date.
Be very wary of programs that do not sound legal; chances are they aren’t. There are many different places that claim they can help you get a new credit profile. Of course, this highly illegal, and it will cause you even more problems, because it will not go unnoticed. Think of the legal costs and the possibility of doing hard time.
Take a look at your credit report if you have a bad score. The item may be essentially correct, but there may be an error someplace. If the date or amount, or some other thing is incorrect it may be possible to get the entire item removed.
Joining a credit union may be a way to boost your credit score when you are having a hard time getting credit. Credit unions are normally located in communities and offer lower interest rates than national banks.
If you notice credit reporting errors, always file a dispute. Compose a letter of dispute to every agency that reported errors, and include as much documentation as you can. Your letter should be sent with a request for return receipt, so you can have a record that it was received by the reporting agency.
It is important to carefully review your monthly credit card statement. If this is the case, you need to call the company right away to avoid them from reporting it to credit reporting agencies.
Be certain to get any credit repayment plan in writing. The documentation you gain from the creditor is important in case the company changes ownership or the creditor is no longer interested in the deal. Upon completion of payment, make sure to get the receipt in writing and send it to the credit reporting agencies.
Take the time to carefully go over all your credit card statements. Make sure you aren’t paying for purchases you didn’t make. You must be accountable for each item on your statement.
When lenders are looking at your credit, an explanation that goes with the report generally will not even be looked at. It is possible that this can be detrimental by drawing closer scrutiny to your report.
Debt Collection
One of the most stressful things about poor credit is dealing with debt collection agencies. If a debt collection agency is harassing you, writing a cease and desist letter can stop the harassment. This doesn’t let the customer off the hook for the debt, it merely stops the threatening calls.
Don’t fall prey to law offices that promise you instant credit fixes. The state of the economy has caused many lawyers to practice unethical methods by promising credit score repair for a steep fee and not delivering. Do the research on your lawyer before you call them.
Part of a nasty credit crunch is having multiple debts that you do not have the money to pay. Try to make sure that you find a little bit of money in your budget for all the creditors you owe payments to. Even if you are only making minimum payments, sending along at least a little money will mollify your creditors and prevent them from contacting collection agencies.
If your credit has suffered and you are trying to rebuild it, many options are available. Prepaid or secured credit cards can help to rebuild your score without late payments or going over your limit. Potential lenders will see that you are working towards becoming more responsible with your credit.
If your low credit rating has ever frustrated you and left you discouraged about your future, then apply the advice here to change your course. This information can assist you in stopping the downward direction of your FICO credit score, and making it head back up.
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