Many people find themselves having to deal with bad credit due to the downturn of the economy, the rise of the cost of living, as well as the increase in layoffs. Luckily, these tricks and tips can show you how to have a better credit score.
If you are buying a home it will not always be easy, and even more difficult if your credit is bad. See about getting an FHA loan, which are loans that the federal government guarantees. Some FHA loans even cover a down payment or your closing costs.
Regular Card
If you are unable to get a new card because of your bad credit, try to apply for secured cards. 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 open a credit card account, keep charges fairly low, and pay it on time, this will go towards improving your credit score.
If you have credit cards with balances that are greater than fifty percent of the maximum, you should pay those down as quickly as possible. It’s best to keep all of your credit cards below the fifty percent mark! Creditors like to see you using your accounts, but still keeping your balances under 50% of your allotted credit.
Having a good record allow you to qualify for things like a home mortgage. Making regular mortgage payments will also help your credit score. Credit rating companies will judge you a reliable risk when you have verifiable assets such as a home. If you have to take out a loan, this will help you.
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. Do not think that you can get away with illegal actions. Think of the legal costs and the possibility of doing hard time.
Dispute any errors that are on your credit report so they are removed. Create a dispute letter for agencies that have the error, and submit additional supporting documents along with it. Send any correspondence by recorded mail to ensure proof of receipt by the agency.
Paying the balances of your cards as fast as you can will help your credit score. It is a toss up as far as which cards are best to pay off first – some choose ones with the highest interest rate, others choose the card with the lowest balance. Beginning to pay your credit card balances off will show creditors that you are making a valiant effort and are credit worthy.
Doing this will ensure a good credit score. Each time you make your payment late it will go against you.
Credit Improvement
Make sure that the credit improvement agency you choose to work with is reputable. As with most industries nowadays, there are a number of shady companies offering credit improvement. Sadly, many people have fallen for credit repair scams. Be a smart consumer and educate yourself by researching user reviews online to find a good agency.
Lenders won’t bother to look at those statements and therefor they are a waste of your time. There is also the possibility that it will just draw attention to that negative event instead of it being overlooked.
Your credit cards are not doing you any favors; avoid using them. Purchase with cash. If you have a situation where you have to put a charge on your credit card, make a point to pay it off as soon as possible.
One of the most nerve-racking aspects of being in debt, and having bad credit, is dealing with collection agencies. Cease and desist instructions can be used to ward off debt collectors to a point, but only really to prevent harassment. A letter like this may stop a collection agency from harassing you, but you are still on the hook to pay your debts.
Be very careful about credit professionals who state that they could fix your credit quickly. The state of the economy has caused many lawyers to practice unethical methods by promising credit score repair for a steep fee and not delivering. Check the reviews and reputation of any lawyer or credit improvement firm thoroughly before you contact them and certainly before you give them any money.
If you have a lot of debt that you cannot pay, it can create a mess. Make sure you pay all your creditors instead of limiting it to just a few. Minimum payments will keep your debt accounts in good standing, and will keep them from ending up in collections.
Now that you know various ways to repair your credit, why should you wait to use them? Use this information to prevent your credit rating from falling and to gradually raise it so that you can avoid it affecting your life negatively.
