Bad credit will make so many projects out of your reach. Bad credit makes it difficult to take advantage of any financial opportunities that arise. You can repair it though, and make steps to prevent it from spiraling down further.
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. FHA loans are great for the individuals that do not have the financial capability to make down payments.
If your credit history has put you in the position where you are not able to obtain a regular credit card, you should try to get a secured credit card to begin rebuilding your credit. Most likely, you will not have a problem obtaining this type of card, but you must add funds to the account before you make any purchases to assure the bank that you will pay. Even though this card will be secured by your own money, you will make payments and manage it as if it were unsecured. This will improve your credit as you show yourself able to make the payments on time.
Any credit cards that have balances over 50% of your limit should be paid off until they are less than 50% of your limit. If your credit card balances exceed 50% of their limits, it will lower your credit score, so spread your debt over multiple cards, or better, pay down the balances.
Getting a reduced interest rate is the easiest way to reduce your overall debt. There are legal limits set in place to control the amount of interest a creditor is allowed to charge you, plus your original debt is all the credit card company paid when you made the purchase. However, you signed a contract agreeing to pay off interests. Your interest rates should be regarded as too high if you plan on suing your creditors.
One thing to watch out for when trying to fix your credit is scammers who say that they can get any negative information deleted from your credit, regardless of its accuracy. You have to wait for seven years before negative data can come off your record. But, you should remain mindful of the fact that errors can be deleted from your report.
Call each of your charge card companies and ask them to lower the limit on them. This will keep you living within your budget, and will show the credit companies that you repay debts. This will allow you to get credit easier in the future.
Dispute any errors that are on your credit report so they are removed. Draft a letter to reporting agencies disputing negative entries and also submit any available documentation. Make sure when you send the dispute package that you request proof by signature that it was received.
Take the time to carefully go over all your credit card statements. Make sure you aren’t paying for purchases you didn’t make. You are the person responsible for checking that there are no errors.
Do not carry high balances on any of your credit accounts. You can up your credit score by just keeping your balances lower. The FICO system has a new level for every twenty percentage points of your credit available.
The worst part of a credit crisis may be the collection agencies. The consumer can use cease and desist orders, but these only stop harassment. This doesn’t let the customer off the hook for the debt, it merely stops the threatening calls.
Do not trust anyone who promises you miracle results. Due to the large number of people experiencing credit difficulties, predatory lawyers have sprung up who charge big fees for credit improvement services that are either useless or illegal. Prior to contacting any lawyer for help fixing your credit, investigate him or her thoroughly.
Overwhelming issues occur when you have multiple debts you can’t pay. Be sure to give a portion of your spendable income to each of your creditors. Even if you are only making minimum payments, sending along at least a little money will mollify your creditors and prevent them from contacting collection agencies.
Credit Score
Easy tips, like the ones in this article, will help you repair your credit and keep it healthy in the future. Having a high credit score is essential in many ways, so it is important to be well-informed about credit score repair.
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