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. When you don’t pay your bills or if you pay fees too late, your credit score can drop. If you have a credit score below 650, you need to read this article right away.
Getting home financing is no small feat, especially if your credit score is less than perfect. 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 be able to secure your down payment and closing costs through an FHA loan. It depends on if you qualify.
Creating a payment plan and sticking with it is just the first step to getting your credit on the road to repair. You can’t just make up a plan and not change how you spend your money. Only buy the things that are absolutely necessary. See if each purchase is necessary and affordable and only purchase something if the answers are “yes”.
If you have credit cards with a utilization level over 50%, then pay them down until they are below 50% utilization. Carrying a balance of more than half your credit limit negatively impacts your credit score. Either pay this balance down or spread it out over multiple cards.
It’s easy to lower your interest rate by ensuring your credit score is high. This should make your monthly payments easier and allow you to pay off your debt much quicker. Compare offers and choose the best interest rate you can find when borrowing money or subscribing to a credit card.
Having a good record allow you to qualify for things like a home mortgage. Paying mortgage notes on time will keep your credit scores high. The more equity you have in your home, the more stability the banks see in you. Having a home also makes you a safer credit risk when you are applying for loans.
Do not fall for the false claims many have about their ability to fix your credit. The claim that they can remove accurate debts from your credit report is false. These things are, generally, on your record for seven years. You can erase information that is incorrect from your credit record.
In order to start repairing your credit, you need to start paying your bills. More specifically, pay them on time and in full. As soon as you have cleared those old debts, you will see an immediate improvement in your credit score.
When looking over your credit report, look closely at the negative report that are listed. If you notice a mistake on your report, you could get some items crossed off. Even if the item itself is right, an error in the date or amount gives you the right to contest it.
Do everything possible to avoid bankruptcy. The record of the bankruptcy appears on your report and affects your credit rating for up to 10 years. Though it may seem necessary at the time, you should weigh the costs over the next ten years before you decide to go through with the filing. Once you have filed for bankruptcy, it may become very difficult to secure a loan or open a new credit account.
Make sure to fully read every single credit card statement that you get. Look for any changes that have happened, and make sure they are correct. You do not want to end up paying for a purchase that you did not make. It is solely your responsibility to be sure that everything is correct.
To keep your credit in good standing and get a better score, maintain a low balance on revolving accounts. Reducing the amount of debt you’re carrying is one of the best ways to improve your credit score. The FICO system makes a note when your balances are at 20, 40, 60, 80, and 100 percent of your available credit.
Your credit score affects the interest rate you will pay on any type of loan. You can change your credit situation, if you adhere to the the tips in this article.