Have you had difficult times because of your bad credit? A lot of people’s credit scores are going down in this economy. Luckily, you can improve your score and start now with the tips in this article.
Financing a new home can be a challenge, especially if you have a history of bad credit. If your income is a factor you may qualify for a FHA loan, which has lower standards and makes the federal government your lender in a sense. FHA loans are also great when a borrower doesn’t have the money to make a down payment or pay closing costs.
If your credit is such that you cannot get a new card to help repair it, apply for a secured one. In order to get the card, you will have to fund the account as sort of an insurance that shows the bank your debts are going to be paid. If you use a credit card responsibly, you will go a long way in repairing your credit.
When you have a good credit rating, you will be able to easily get a mortgage loan. You can improve your credit by paying your mortgage on time. Owning a valuable asset like a house will improve your financial stability and make you appear more creditworthy. This is helpful in case you want to borrow money.
Interest Rates
If your creditors try to jack up your interest rates, do not pay them. You may be able to challenge an interest rate that is extremely high. Keep in mind that you did sign a contract agreeing that interest rates were acceptable. The only way you are legally able to sue the creditors is if you are able to prove that your interest rates are much too high.
If you are looking to repair your credit, then you should not believe a company if they promise they can remove negative information from the report. Specifically if this information is correct. All information remains on your credit report for a period of seven years or more. You can, however, succeed at having incorrect information erased from your credit reports.
Don’t risk prison. A common scam involves teaching you how to make a completely new, albeit fraudulent, credit file. Needless to say, this is against the law and you are likely to get caught. Taking these short cuts will end up costing you money and could lead to a stay in jail.
If you find any errors in your credit reports, you should dispute them. Draft a dispute letter that will go to each credit rating agency that shows an error, and prepare any supporting documents. Send your dispute package with a return receipt request so that you have proof that it was received by the agency.
If your credit is poor, take the first step to repairing it by closing out the majority of your cards, leaving yourself just one to use. You should plan on how you will pay the remaining open balances, or how to consolidate them into one account. Paying off one main credit card will be easier than paying off several cheaper ones.
Carefully check all charges on your monthly credit card statement for errors. If there are late fees you don’t deserve, act as soon as possible to get the matter resolved before it can affect your credit score.
If you are able to get a payment plan worked out with any of your creditors, make sure you get the terms in writing. This will give you important documentation in case of an ownership change or if the creditor tries to back out of the agreement. As soon as you get it paid off, have that in writing so you are able to inform the credit reporting agencies.
If you need to repair your credit score, you should pay your credit card balances as fast as possible. Pay off accounts with the highest interest rates first. This will show responsibility to creditors.
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. You need to be sure that everything is correct on the statements.
Avoid using your credit cards. Use cash to pay for things whenever possible. If you absolutely need to use a credit card, be prepared to pay off the balance at the end of the month or as soon as possible.
Credit Score
Avoid frustration about a low credit score. Stop your credit score from spiraling downward, and look for ways to get back on track.
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