There are a lot of ways to damage your credit score, from falling for a credit card scam to just being unlucky with the recent economy. The good news is that there are some things that you can do to repair it.
Fha Loans
If you are buying a home it will not always be easy, and even more difficult if your credit is bad. Look into alternative financing options like FHA loans. FHA loans are also great when a borrower doesn’t have the money to make a down payment or pay closing costs.
If your credit is such that you cannot get a new card to help repair it, apply for a secured one. The account is funded in advance, which provides the lender with a level of insurance against unpaid debts. This is why secured cards are often easier to get. If you utilize a credit card responsibly, it can aid in the repair of your credit rating.
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. Creditors like to see you using your accounts, but still keeping your balances under 50% of your allotted credit.
Having a lower credit score can lower your interest rate. This should make your monthly payments easier and allow you to pay off your debt much quicker. Paying your outstanding balances on time is the best way to keep your credit in check, and to obtain lower interest rates.
Interest Rates
You can lower your debt by refusing to acknowledge the part of your debt that has been accrued by significantly high interest rates. Creditors who charge exorbitant interest may be just a law suit away from having to wipe the slate clean. Although, in reality, you did agree in advance to pay any interest charges incurred. If you choose to bring a lawsuit against your creditors, use the high interest rates against them.
Before consulting a credit counseling agency, be sure to check out their background and history. While many counselors are reputable and exist to offer real help, some do have ulterior motives. Also be aware that there are other credit counseling services run by dishonest people. These services are scams and should be avoided at any cost. To help protect yourself from fraud, investigate any credit counselors. One way to check an agency out is to check with the Better Business Bureau.
Good credit isn’t worth much if you are in lockup. There are schemes online that will show you how to establish an additional credit file. This tactic is not legal, and you face serious repercussions if you are caught. Penalties can include large fines and possibly even incarceration.
Before you get into an agreement about settling a debt, make sure you understand how it’s going to affect your overall credit. Some debt settlements are better than others. Do your homework and find out how your score will be impacted before agreeing to anything. The creditor does not care what happens to your credit score, as long as they get their money.
Take the necessary steps to fix any mistakes that you see on your credit reports by filing an official dispute. Report any errors to the three credit reporting agencies. Be sure to include any documents to support your case. Ask for a return receipt so that you can prove that the agency got your package.
Credit Card
A first step in fixing your credit is to close all credit card accounts that are unnecessary. Aim to only have one account. You may be able to transfer balances to your remaining account. 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. If there are, you will need to contact the company immediately to avoid them reporting this to a credit reporting agency,
If credit repair is something you have been considering, the first step would be to pay down your credit card balances. Always pay off the card with the highest interest rate first and then work you way down. Doing so shows your creditors that you are taking your debt problem seriously.
Make sure to fully read every single credit card statement that you get. Go through line by line for accuracy, and to prevent getting charged for an item or service you did not actually get. You are the person responsible for checking that there are no errors.
Reducing the outstanding balances on some of your credit cards can improve your credit rating. You could increase your credit score just by paying down some balances. FICO will base your score on what percent of your available balance is in use, so keep that in mind.
Nursing your credit back to good health is not as hard as it looks at first, especially when you are willing to make a persistent effort and listen to good advice. Apply the advice from this article to start your march toward better credit score days.
