No matter what your current situation, you have probably damaged your credit by opening one too many credit cards or being affected by the economic downturn. Luckily, there here are some steps that you can take to turn things around.
Financing homes can be made more difficult when your credit score is low. 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 may even be able to secure your down payment and closing costs through an FHA loan. It depends on if you qualify.
If you have credit cards where the balance is more than half of your credit limit, pay these down right away. You should keep your balances under fifty percent; anything over this and you can lower your credit rating, so spread out the money you own and pay down your credit cards.
Credit Score
If your credit is good, it’s easy to get a mortgage on a new home. Making your mortgage payment on time each month will also boost your credit score. Home ownership also means you have assets that you can rely on to increase your credit score. This is helpful in case you want to borrow money.
Getting a reduced interest rate is the easiest way to reduce your overall debt. It is bordering on illegal for credit card companies to charge you skyrocketed interest rates. However, you signed a contract agreeing to pay off interests. It is likely you can have exorbitant interest rates reduced if you sue the creditor.
Stay in touch with credit card companies if you wish to repair your score. Maintaining contact shows your good faith and can help you minimize further debt. One way to tackle this problem is to call them and ask if you can have the due date or monthly charge amount changed.
Avoid credit schemes that will get you in trouble. The web is full of scams that show you how you can craft a deceptive credit file. It’s illegal to do this and you can get caught easily. Penalties can include large fines and possibly even incarceration.
Credit Companies
Ask credit companies to lower all of your card limits. 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.
Before you agree to any sort of repayment plan to settle your debts, consider how this will affect your credit score. There are ways that are less damaging than others, that is why it is important to research about it before starting an agreement with creditors. The credit companies are looking at their own bottom line and are not concerned with your credit score.
If you find a mistake on your credit report, be sure to dispute it! Gather your support documents, make a list of the errors, and compose a letter to pertinent agencies. Use a return receipt when you mail your package so that you can prove that the agency received it.
High credit card balances can damage your credit. The first step to repairing credit is to pay those balances down. Work on paying off credit cards that have the highest interest rates or high balances. This will show future creditors that you take your debts seriously.
Comb through all of the bills 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. Take the reigns, and go over your monthly credit card statements. No one else will do it, it is your responsibility.
There are many credit score repair agencies advertised; you must check with places like the Better Business Bureau to make sure that you deal with a reputable one. Like any industry making claims to help others with their finances, scoundrels and incompetents are usually only discovered after you have lost money, so do your research up front. Some people have gotten scammed by these credit agencies. You can separate the scam artists from the good agencies by relying on user reviews found online.
One way you can fix your credit is by taking small steps to build good credit. A secured credit card, one that is prepaid, will help you improve your credit score. This helps prove to lenders that you’re credit worthy and responsible.
Write down a plan that guides you towards paying off your debts. While these items will still appear on your report, you will no longer be penalized by having so much unpaid debt.
Fixing your damaged credit may seem like an overwhelming task in the beginning, but with a bit of work and a bit of guidance, you can turn things around and get your credit back on track. Use what you have read here to get back on track with your credit.
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