Many people fall victim to the consumer driven society we live in and spend more than they could pay off at the interest rates offered by credit card companies. You can reverse the effects of these actions though.
Financing a new home can be a challenge, especially if you have a history of bad credit. 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 ideal for those who cannot afford the high down payment that most banks require.
If you have to improve your credit, make a solid plan and follow it. You have to be committed to making real changes to your spending habits. Pay cash for things, and cut out unnecessary expenses. Ask yourself if a certain purchase is both necessary and affordable. Buy the item if your answer to this question is “yes”.
Credit Cards
Any of your credit cards with balances that are above 50% of your overall limit need to be paid off as soon as possible, until the balance is less than 50%. Any time you exceed 50% of your credit limit, your credit rating is affected. Pay off credit cards as fast as you can, or spread the debt out further.
You can receive a better interest rate if you have excellent credit. Lower interest rates make paying bills easier, and prevents you from incurring debt. Paying your outstanding balances on time is the best way to keep your credit in check, and to obtain lower interest rates.
Credit Score
Good credit scores allow you to take out loans, buy a house, and make other large purchases. Timely mortgage payments augment your credit score. When you own your own home it shows that you have assets and financial stability. Having a good credit score is important if you need to take out a loan.
If your debt includes large amounts for interest charges contact the debt collector and see whether you can pay the original debt and avoid some of the additional interest charges. It is bordering on illegal for credit card companies to charge you skyrocketed interest rates. You did however sign a contract that agrees you will pay off all interests as well as the debt. It is likely you can have exorbitant interest rates reduced if you sue the creditor.
Do not fall for the false claims many have about their ability to fix your credit. The claim that they can remove accurate debts from your credit report is false. These things are, generally, on your record for seven years. You can erase information that is incorrect from your credit record.
When you are trying to fix your credit record, call your creditors and make payment arrangements that will benefit both of you. When you work with company you are not working against anyone, including yourself. This will help prevent furthering yourself into debt. Credit card agents may have the authority to eliminate monthly charges, extend your due date or change your billing cycle.
Stay cautious and aware of scams online that can lead you to even bigger problems. A common scam involves teaching you how to make a completely new, albeit fraudulent, credit file. You will be prosecuted, it is against the law. The criminal charges that you face will be very expensive, and you may also have to serve prison time if found guilty.
Dispute every error you identify on your credit report. Draft a dispute letter that will go to each credit rating agency that shows an error, and prepare any supporting documents. 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.
If you are having problems retaining control of your charge habits, close all old accounts except for one. Make necessary arrangements to set up payments, or transfer the balance to your remaining account. This can help you avoid paying down smaller balances and focus on paying one card off.
If you are able to successfully negotiate a payment schedule for a debt, it is important to request a copy of the agreement in writing. This will provide proof of your agreement in case any problems ever arise. You also want it in writing if it gets paid off so you can go ahead and send it to credit reporting agencies.
Credit Score
It can seem impossible to repair your credit score, but just knowing what the steps are and making a plan can make it seem much less intimidating. Use the information in this article to boost your credit score.
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