Being fully aware of past and current debt can help you control incurring new debt that cannot be managed. But now it is time to go into damage control mode and repair your credit. The following advice can greatly help you rebuild your credit rating.
Financing a home is not always an easy task, especially when you have less than perfect credit. If this is the case, try to get an FHA loan, which are loans backed by federal government. FHA loans even apply for someone who doesn’t have closing costs or the funds that are needed for down payment.
The first step in credit score improvement is to build a plan. You must be dedicated to making some significant changes in the way you spend your money. Only the necessities can be purchased from here on in. Before making any purchase, determine if it is within your means and if it is indispensable. Don’t buy the item unless you answer “yes” to both of these questions.
Higher Balances
If you have credit cards with balances that are greater than fifty percent of the maximum, you should pay those down as quickly as possible. It’s best to keep all of your credit cards below the fifty percent mark! Credit card balances are among the factors taken into account when determining your credit score. Maintaining balances over 50% will lower your rating. You can attain lower your balances by using balance transfers to move debt from accounts with higher balances to those with lower balances, or by simply paying off some of your higher balances.
If you can afford to pay another monthly bill, an installment account paid on time will increase your credit rating. Choose an installment account you can afford, since you will have to leave a certain amount of money on it at all times. If these accounts are properly managed, they can provide a quick boost to your credit score.
If credit improvement is something you are investigating and a company has told you they can strike true, but negative, information off of your credit report, they are lying. Unfortunately, this negative information stays on your credit record for at least seven years. If there is incorrect, negative information, you can get it removed.
As you work toward repairing your credit score, you should be willing to cooperate and work with your creditors. This will assure them that you want to handle your debt and keep you from getting even further behind. It is perfectly appropriate to call and request an adjustment to your interest rate or to push back a payment date if needed.
Stay cautious and aware of scams online that can lead you to even bigger problems. There are less than honest entities that will show you how to make a brand new credit file. This is illegal and you will most certainly get caught. Not only can legal fees add up, but you could end up in jail.
Credit Score
Before agreeing on settling a debt, find out how if the process will raise or lower your credit score. Some settlement agreements can actually be bad for your credit score, so be wary and do your homework. They are just out to get their money and do not care how that effects your credit score.
If you are trying to improve your credit score but are having difficulty gaining access to new credit in order to do so, join a credit union. Due to their focus on community finances rather than national ones, credit unions may provide better interest rates and more credit services than typical banks.
If you find a mistake on your credit report, be sure to dispute it! You should compose a letter to the agencies that have made the errors, and provide proof that you are correct. 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.
Do not use credit cards to pay for things that you simply cannot afford. You need to change your thinking to consider your future goals, not just buy all of the things you want right now. In past years, people used good credit ratings to buy the items that they normally couldn’t afford, and they are now currently paying big payments. Take a deep look at your finances, and determine what you can realistically afford to spend.
If you want to get your credit score looking good, it takes quite a bit of common sense. Put these simple steps to use to repair your credit situation.