You may have been able to prevent debts if you had realized who you currently owe money to and just how much you owe. But now it is time to go into damage control mode and repair your credit. Follow these tips to repair a bad credit score quickly and efficiently.
An imperfect credit rating can make financing a home even more difficult than normal. In this situation, it is a good idea to try to obtain an FHA loan, because these loans are guaranteed by the federal government. If you do not have a down payment or money for closing, consider a FHA loan
If you need to repair your credit, the first step is to come up with a workable plan and stick to it. Real changes come from commitment to healthy spending habits. Be sure to buy only the things that you need. Put each potential purchase to the test: is it within your means and is it something that you really need?
Interest Rates
In order to make sure that you do not overpay, know that you can dispute your really high interest rates. 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. Remember that you agreed to pay that interest when you signed the contract. If you choose to bring a lawsuit against your creditors, use the high interest rates against them.
As you work toward repairing your credit score, you should be willing to cooperate and work with your creditors. Maintaining contact shows your good faith and can help you minimize further debt. Politely ask if it is possible to have your minimum monthly payment adjusted or due date changed.
Don’t attempt to fix your credit in a way that will result in you breaking any laws. The web is full of scams that show you how you can craft a deceptive credit file. Do not attempt this because it’s illegal; you will not be able to avoid getting caught. The legal costs can cripple you, and there is a very good chance you will be sent to jail.
Live within your means. You will have to change the way you think in order to do this correctly. While you may see your peers racking up credit debt, be sure to not fall into the same trap. Keep track of your spending habits and income, then realistically create a budget that will get you out of your debt dilemma.
The first step in credit score repair is to close all but one of your credit accounts as soon as possible. Make the minimum payment each month on your other accounts, but make the largest payment possible to the one account you are focusing on. This can help you avoid paying down smaller balances and focus on paying one card off.
Be certain to get any credit repayment plan in writing. You want documentation to back yourself up so there will be no problems in the future, and if the company owner changes you will have more of a chance of keeping your plan. When the debt is eventually paid or settled in full, you should request documentation of this and forward copies to the primary credit reporting companies.
Do everything possible to avoid bankruptcy. This will reflect on your credit report for the next 10 years. Bankruptcy not only zeros out your debt, it also zeros out your credit score. If you do file for bankruptcy, it will be extremely difficult to get approved for a loan or a credit card for many years, if ever.
Pay off any balances as soon as you can. First work on the cards with the steepest balances or interest rates. This will show future creditors that you take your debts seriously.
Credit Report
Paying your credit cards on time keeps you in good standing on your credit report. Each late payment that you make shows on your personal credit report and can hurt you when the time comes to take out a loan.
Paying off your debts and restoring your credit is a much wiser decision than you might have previously thought. However, if you implement the advice you have just been given, you can attain your goal of having a respectable credit rating once again.
