Bad credit is an unfortunate detour on the road of life. It can prevent you from leading the life you desire and living your life to its full potential. There are a few things you can do to improve and protect your credit.
For some it may hard to finance their home due to having less than ideal credit. See about getting an FHA loan, which are loans that the federal government guarantees. It might be possible to get an FHA loan even if you don’t have the money for a down payment or the closing costs involved.
If your credit card has a balance of over 50% of your limit, it should be your number one priority to pay it off until the balance is under 50%. When balances are over 50%, your credit rating goes down significantly, so try to either spread out your debt or, ideally, pay off your credit cards.
A good credit report means you are more likely to get financing for a home. Fulfilling your mortgage obligation in a timely fashion does a great deal of good for your credit rating. As a homeowner, you will have a major asset that can have positive effects on your credit profile. Financial stability is important should you need a loan.
Installment Account
Getting an installment account can help you earn money and provide a boost to your credit. Open an installment account that you can pay for and make sure to keep an affordable monthly minimum on it. Your credit score will significantly get better if you get an account.
Try to negotiate with your creditors about the amount of interest you’ll pay on an old debt. An interest rate that is shockingly high can possibly be ruled as illegal in certain cases. On the other hand, you’re likely bound by a contractual agreement to pay any interest charged by lenders. You can consider suing your creditors if the interest rates are outrageously high.
If someone promises you to improve your score by changing your factual history, this is a scam. Negative entries that are otherwise accurate will stay on your credit report for a minimum of seven years. However, information that is not correct can be removed.
Credit Score
Before you agree to any sort of repayment plan to settle your debts, consider how this will affect your credit score. Some settlement agreements can actually be bad for your credit score, so be wary and do your homework. The creditor does not care what happens to your credit score, as long as they get their money.
Look through your credit card statement each month and make sure that it is correct. If this is the case, you need to call the company right away to avoid them from reporting it to credit reporting agencies.
If you and a creditor agree on a payment plan, make sure the agreement is committed to paper. This will provide proof of your agreement in case any problems ever arise. Once you make the final payment, get a statement that verifies that the debt has been satisfied and send it to the various credit reporting agencies.
Try lowering the balance of any revolving accounts you have. Reducing the amount of debt you’re carrying is one of the best ways to improve your credit score. When balances are and increments of twenty percent of your total available balance on that account, the FICO system will take note.
Our initial inclination is to defend ourselves, but in truth, lenders will not even glance at your defending statement. The basic reason for bad marks on credit is simple. You did not pay something you were supposed to pay. Lenders are often discouraged by people that make excuses for bad credit.
Debt collectors hounding you can be very stressful. Debtors can stop harassment by collection agencies with cease and desist notices, but know that this is all they do. Sending the letter does not mean you no longer have to pay the bill, it only stops the collection agency from calling.
In order to start the process of credit score repair, it is wise to seek new credit as a way to re-establish yourself. If you use a credit card that is prepaid you can build up your credit and not have any bad credit reports. Doing this shows lenders that you can be trusted with credit.
These tips will make a big difference in your fight against bad credit. The time you invest learning about ways to repair credit can be fruitful in improving your credit rating.