You need to know what you owe and the companies to which you owe money before it is too late and still more debt is created. At this point, you need to roll up your sleeves and start doing what is needed to fix your credit. Here are some relatively easy and effective ways to improve your credit.
Financing a home can be difficult if you have bad credit. If your income is a factor you may qualify for a FHA loan, which has lower standards and makes the federal government your lender in a sense. FHA loans are ideal for those who cannot afford the high down payment that most banks require.
Credit Card
If your credit card has a balance of over 50% of your limit, it should be your number one priority to pay it off until the balance is under 50%. If your credit card balances exceed 50% of their limits, it will lower your credit score, so spread your debt over multiple cards, or better, pay down the balances.
You can reduce your interest rate by maintaining a high credit score. This can help lower your monthly payments, and help you pay them off quicker. Getting better interest rates leads to an easily maintainable good credit score.
When you have a good credit rating, you will be able to easily get a mortgage loan. When your mortgage is paid in full, you will be rewarded with increased scores on your credit file. Once you own a home, you will have financial stability secured by your assets, thus a good credit score. This will be beneficial when you apply for loans.
Installment Account
Opening an installment account can give quite a boost to your credit score. With an installment account there is a monthly minimum you need to keep, so only open an affordable account. Paying on time and maintaining a balance will help improve your credit score.
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. However, you signed a contract agreeing to pay off interests. Your interest rates should be regarded as too high if you plan on suing your creditors.
If credit restoration is something you are investigating and a company has told you they can strike true, but negative, information off of your credit report, they are lying. If the information is correct, it will remain as part of your report, in most cases, for seven years. If the information is an error, the credit report can be corrected.
Make sure to check all three of your credit reports, and pay extra attention to the negative reports when you are working on repairing bad credit. If you find errors in any of the information, you might be able to request the entire negative record be removed from your credit report.
Credit Unions
Joining a credit union may be a way to boost your credit score when you are having a hard time getting credit. Credit unions typically offer a wider variety of credit options at better interest rates than a traditional bank. Credit unions are usually non-profit, which means better deals for you.
Dispute any errors that you find on any of your credit reports. Gather all supporting documents and any errors you find, and send them with a letter to the credit reporting agencies. Send any correspondence by recorded mail to ensure proof of receipt by the agency.
Do everything you can to avoid bankruptcy. Bankruptcy can make getting credit almost impossible for many years. It might seem like a good thing but you will be affected down the line. 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 your entire balance on your credit card in order to repair your credit. Work on paying off credit cards that have the highest interest rates or high balances. Doing so shows your creditors that you are taking your debt problem seriously.
Lowering the balances you carry on revolving accounts can improve your credit score. You can raise your score by lowering your balances. Increments of twenty of available credit are noted by fico.
Avoid using those credit cards. Use cash for purchases instead while you are building back your credit. If you do use a credit card, pay the full balance each month.
Credit Score
Any time that you take out a line of credit it is going to negatively impact 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.
As this article has spelled out, fixing your credit is not rocket science, and it may be easier to do than you think. You can easily achieve your goal by following this helpful information.
