Having a poor credit score is among the most frustrating situations that takes the fun out of life. Bad credit makes it difficult to take advantage of any financial opportunities that arise. However, it is possible to fix your current credit problems and take steps to protect your future credit rating.
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 can even work when someone lacks the funds for down payment or closing costs.
Credit Limit
If you have credit cards where the balance is more than half of your credit limit, pay these down right away. If you owe more than half of your credit limit on any credit card, this will have a negative impact on your rating. Plan to pay down that card as soon as possible, or see about transferring some of that debt.
You will be able to get a lower interest rate if you keep your personal credit score low. Lower interest rates make paying bills easier, and prevents you from incurring debt. Quickly paying off your debts is a good way to improve your credit score. This will give you access to more competitive rates in the future.
Excessive interest rates can be contested. However, it is best not to sign contracts containing them in the first place. An interest rate that is shockingly high can possibly be ruled as illegal in certain cases. Your initial agreement likely included a commitment to pay interest. It is likely you can have exorbitant interest rates reduced if you sue the creditor.
Before consulting a counselor for credit score improvement, do your research. There are a lot of unscrupulous agencies scattered in among the few legitimate credit counselors that are really there to help you. Some credit services are nothing more than fly-by-night scams. Smart consumers will always check to see that credit counseling agencies are, in fact, legitimate before working with them.
Debt Settlement
Before you agree on an agreement for settling your debt settlement, you should determine what affect this will have on your credit score. Some settlement agreements can actually be bad for your credit score, so be wary and do your homework. Some debt settlement companies are only after profits and do not communicate the likely consequences of their methods.
Consider joining a credit union. They offer a lot of benefits to their members and it can be easier to obtain a line of credit from them. They may offer better rates and more credit due to local conditions as compared to national ones.
Dispute any errors that are on your credit report so they are removed. 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.
Cannot Afford
Do not use credit cards to pay for things that you simply cannot afford. This may mean that you need to alter the way you have been thinking. Unfortunately, easy credit has lured many people into buying luxuries that they don’t need and cannot afford, which will always catch up with them. Take a realistic look at your financial situation and determine how much you can actually spend.
Taking time to examine your monthly credit card bill is critical to ensure that there are no errors. If there are late fees, you have to make sure that you take care of them immediately with the company so that they don’t send that information to the credit bureaus.
Paying the balances of your cards as fast as you can will help your credit score. Pay off high-interest debt first, as it grows the fastest. This will show creditors that you are responsible with the cards.
Go through all the statements you receive. Double-check every charge, to make sure that everything is accurate and you were only charged once for your purchases. Do not trust the credit card companies to have your back, guarantee you do not pay debt that is not yours yourself.
If you go with a repair company to improve your credit score, be sure it is legitimate. There are a lot of credit restoration agencies that you will want to avoid. Some people have been victimized by scams that were supposed to help their credit. See if the company in question has a reputation on any of the user review sites before you commence business with them.
Build your credit back up to repair it. Utilizing prepaid credit cards allows you to improve your credit score with no concerns about late payments or negative information ruining your credit report. Potential lenders will be sure to see that you can be relied upon and are worthy of credit.
Credit Score
Your credit score will get damaged each time you open another line of credit. If you want to keep your credit score high, you need to resist the urge to open new accounts. After you open new credit, you will see your score drop.
Following these simple tips can help you get on the road to repairing your credit and keeping it healthy. Having a good credit score is crucial to getting the best interest rates possible and is definitely worth the effort.
