Bad credit affects every financial transaction you make. You have doubtless experienced the downside of a low credit score. There are millions of people who have seen their credit score go down in today’s rough economic climate. You can turn things around, though. A good start is to check out these tips to repair your credit rating.
Secured Credit
If you are buying a home it will not always be easy, and even more difficult if your credit is bad. Federally guaranteed loans (FHA loans) may be an option. If you do not have a down payment or money for closing, consider a FHA loan
Secured credit cards are an effective way for you to start rebuilding your credit. These are extremely easy to qualify for. A secured credit card looks just like a regular card, and works like a regular card, but you have to have the necessary money in an account to guarantee payment. If you use a credit card well, your credit rating will begin rising.
If you have credit cards with a balance that exceeds 50% of your credit limit, you must continue to pay on them until the balance is lower than 50% of the credit limit. Once your balance reaches 50%, your rating starts to really dip. At that point, it is ideal to pay off your cards altogether, but if not, try to spread out the debt.
Improve your credit score, as well as make some profit, through an installment account. All installment accounts must stay above the set monthly minimum, so only open one if you can afford it. You might see a big improvement in your credit score, if you can handle an installment account responsibly.
Avoid paying off high interest rates so that you don’t pay too much. It is bordering on illegal for credit card companies to charge you skyrocketed interest rates. Although, in reality, you did agree in advance to pay any interest charges incurred. It is likely you can have exorbitant interest rates reduced if you sue the creditor.
Start Paying
Good credit isn’t worth much if you are in lockup. There are less than honest entities that will show you how to make a brand new credit file. This is illegal and you will most certainly get caught. The legal costs can cripple you, and there is a very good chance you will be sent to jail.
Start paying on bills to help your credit. Paying your bills on time and for the full amount is important. Once you start paying your past bills off, you will notice an immediate improvement in your credit.
Before consulting a credit counseling agency, be sure to check out their background and history. Some counselors truly want to help you, while others are untrustworthy and have other motives. Other counselors are nothing more than scam artists. It is wise for consumers to not give out personal information unless they are absolutely sure that the company is legit.
If you see any erroneous information on your credit report, file a dispute so you can have the information removed. Gather all supporting documents and any errors you find, and send them with a letter to the credit reporting agencies. Ask for a return receipt so that you can prove that the agency got your package.
Learn what affect a debt settlement plan will have on your credit rating before you sign up. Some settlement agreements can actually be bad for your credit score, so be wary and do your homework. Remember creditors want their money. They really don’t care about your credit scores. That is up to you to protect.
Credit Card
Check over your credit bill each month to make sure there are no errors. If there are, you will need to contact the company immediately to avoid them reporting this to a credit reporting agency,
As part of your credit score repair process, it is a good idea to terminate all of your credit cards except one. Call your credit card company and try to work out a repayment plan, or transfer the balances of multiple cards to one lower interest card. This way you can work on paying one credit card balance off, instead of a bunch of smaller ones.
Make sure to review your credit card statement monthly to make sure there are no errors. Should there be any mistakes, contact the company and talk to them to avoid being reported to the credit companies.
High credit card balances can damage your credit. The first step to repairing credit is to pay those balances down. Always pay off the card with the highest interest rate first and then work you way down. Beginning to pay your credit card balances off will show creditors that you are making a valiant effort and are credit worthy.
Filing for bankruptcy is a bad idea. This negative mark will stay on your report for 10 years. You may think that bankruptcy is your only option to rid yourself from debt, however look at your long term financial goals before deciding to file for it. Once bankruptcy has been filed, it could permanently halt your chances of ever obtaining credit again in the future.
This is the first step toward having an A+ credit rating. Every late credit card payment can damage your credit score.
Repairing your credit isn’t something you can do overnight, but the best way to fix it is to slowly raise it back up. If you use a credit card that is prepaid you can build up your credit and not have any bad credit reports. A potential lender will see this as a responsible move on your part, showing that you are credit worthy.
Collection Agency
Having to deal with a collection agency can be extremely stressful. Make sure you know that cease and desists of any type can only stop you from being harassed, you’re still going to be in debt. Sending the letter does not mean you no longer have to pay the bill, it only stops the collection agency from calling.
Your credit score is strongly affected by how promptly you pay your bills. Setting up payment reminders will help you not to forget about making a payment. You can set up reminders in many ways. You can have your bank remind you, put them into your scheduling software, or even have your creditors remind you.
If your poor credit score frustrates you, try using these tips to change it. The helpful hints here can end your credit rating free-fall and even encourage it to start rising.
These days, everyone wants to know about the world of Credit Repair, but not everyone knows where to turn for the right information. This article, luckily, is exactly what you need for that. Now put what you have read in this article to use.
