The results of a poor credit score are traumatic to deal with. It is much more frustrating when you’re reminded of bad decisions you made in the past. It is not easy to rebuild credit, but it is quite possible. This article will help you design a plan adapted to your situation.
If you don’t have very good credit, financing your home may not be easy. 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 might be able to get an FHA loan even if you cannot afford closing costs or down payments.
The first thing you need to do before beginning to repair your credit is outline th steps required to do so, then follow those steps without deviation. If you want to change then you have to work hard and stick with it. Avoid buying what you don’t need. See if each purchase is necessary and affordable and only purchase something if the answers are “yes”.
Credit Card
If your credit does not allow you to obtain new credit, getting a secured one is much easier and will help fix your credit. Most likely, a secured credit card will be easy for you to get, but you have to fund the credit account before you purchase so the bank knows that you won’t miss any payments. Responsible use of any credit card can help your credit rating. However, never forget that irresponsible use will get you in trouble every time.
If you make a decent income, consider an installment account when you want to give your credit score a boost. An installment account requires that you make a minimum payment each month. It is imperative that you only take an installment account that is affordable. If you use these accounts, your score will go up rapidly.
When you are trying to fix your credit record, call your creditors and make payment arrangements that will benefit both of you. If you do this you will not go into debt more and make your situation worse than it was. This can be accomplished by negotiating with them for a change in due date or monthly charges.
You need to carefully scrutinize credit counselors before you consult them for help with repairing your credit. Many counselors are on the up-and-up and are truly helpful. Others just want to take money from you. Others are outright scams. A savvy consumer will always do his or her research on any credit counseling service to ensure that the agency is legitimate.
Give the credit card companies a call and find out if they will lower your credit limit. This will prevent overextending yourself and lets the company know about your responsible borrowing habits. You could get credit easier in the future.
If your credit isn’t so hot, but you need new credit to demonstrate responsibility, then look up your local credit union. Credit unions focus more on the local situation instead of the national one, and may provide more options or rates that are more favorable than those of a larger bank.
If you find any errors on your credit reports, dispute them. A dispute letter should be sent to any of the agencies that are reporting the error. Be sure to include supporting documents. Send any correspondence by recorded mail to ensure proof of receipt by the agency.
To rebuild bad credit, it can be a good idea to get rid of your extra credit cards. You should only have one. You will want to either transfer your balances onto the one remaining card or set up payment arrangements, but close the account to new charges. By doing this you can make your bills more manageable. Instead of a mailbox full of credit card bills, you will only have one.
Do not file for bankruptcy. When you file for bankruptcy it shows for 10 years, your credit report will suffer from this. It sounds very appealing to clear out your debt but in the long run you’re just hurting yourself. Once you have filed for bankruptcy, it may become very difficult to secure a loan or open a new credit account.
Credit Score
Lowering the balances you carry on revolving accounts can improve your credit score. Reducing the amount of debt you’re carrying is one of the best ways to improve your credit score. The FICO system will make a note when the balances are at 20, 40, 60, 80 and 100 percent of the total credit available.
The following advice will help you get back on the road to repairing your credit. You just have to be sure that you are consistent with your efforts and meet all your obligations. It is possible to make your credit better, so don’t delay and get to it!