Poor credit is a terrible thing for you to deal with as you journey through life. It can make you feel like you are in debtors’ prison with no hope of escape. Here are a few easy tips on how you can fix your credit and make sure it stays positive in the future.
Fha Loan
Getting a traditional home loan can be difficult, if not impossible, with imperfect credit. An FHA loan can be helpful in such a case since the federal government backs these loans. It might be possible to get an FHA loan even if you don’t have the money for a down payment or the closing costs involved.
There are secured credit cards available if your credit rating is too low to open up a regular credit card account. These accounts are much easier to get as you will have to fund the new account ahead of time with a deposit to cover any purchases. Using this new credit card in a responsible manner will help to build back up your good credit rating.
If your credit is good, it’s easy to get a mortgage on a new home. You will get a better credit score by paying your mortgage payment on time. When you are a home owner you will be financially stable based on what you own. A good credit score is necessary when you need to take out a loan.
Interest Rates
If you don’t want to pay too much at a time, you can avoid paying higher interest rates than you started with. 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 have entered into a legal agreement that requires you to pay accrued interest. Should you sue any creditors, it is important to push the fact that the interest rates are outrageously high.
Repairing your credit is actually pretty simple. The first step is to focus on paying your late bills. More precisely, you must begin paying your bills fully and on time. When you pay off past due lines of credit your credit score will go up.
Before you hire a credit counselor, make sure that you have done your research. Some credit counselors offer real help while others have more dubious things in mind. Others are just plain fraudulent. It is smart to verify the legitimacy of credit counselors prior to getting involved with them.
You cannot live a life that is beyond your means. If you’ve been living outside your means, then get ready for a reality check. In many cases, people are using credit cards to buy things they want, rather than focusing on things that they need. Take a deep look at your finances, and determine what you can realistically afford to spend.
As part of your credit restoration process, it is a good idea to terminate all of your credit cards except one. You may be able to transfer balances to your remaining account. By doing this, you can concentrate on a single credit card payment, as opposed to a lot of smaller ones each month.
Credit Card
When you receive a credit card statement you should immediately look at the statement. Make sure that all of your fees and charges are correct and that there are not any items that were not authorized by you. Take the reigns, and go over your monthly credit card statements. No one else will do it, it is your responsibility.
For a better credit rating, lower the balances on your revolving accounts. You can raise your score by lowering your balances. When balances reach anywhere from 20-100% of your available credit balances (in 20% intervals), the FICO system will make a note.
Our initial inclination is to defend ourselves, but in truth, lenders will not even glance at your defending statement. Inclusion of the defending statement could actually have the opposite effect as it brings more attention to the fact that you have a negative mark on your report.
The worst part of a credit crisis may be the collection agencies. If a debt collection agency is harassing you, writing a cease and desist letter can stop the harassment. Letters such as these prevent calls from collections agencies, but the consumer must still pay the debts under dispute.
Do not trust anyone who promises you miracle results. The state of the economy has caused many lawyers to practice unethical methods by promising credit score improvement for a steep fee and not delivering. Before contacting a lawyer for assistance, do some investigating.
You may get into the situation that you have multiple debts and you just don’t have enough money to pay them all. When you do have money to apply to your debt, spread it among all of the creditors so that each one gets a little. This will keep your account in good standing while you are paying down your debt.
Credit Score
New lines of credit either long-term loans or a new credit card will initially lower your credit score. When you are offered a credit card when checking out at the store, fight the urge to get one to receive the discounts that are offered to you. You credit score is going to drop immediately after opening that new line of credit.
Following these simple tips can help you get on the road to repairing your credit and keeping it healthy. A high credit rating is essential for most people, so learning about repairing your credit is hardly a waste of time.
