How To Go About Fixing Your Credit
Having bad credit can be stressful and annoying. It’s one of the main stumbling blocks to a successful life. It can make you feel like you are in debtors’ prison with no hope of escape. However, it is possible to fix your current credit problems and take steps to protect your future credit rating.
Financing a new home can be a challenge, especially if you have a history of bad credit. FHA loans are good options in these circumstances, because the federal government guarantees them. FHA loans are ideal for those who cannot afford the high down payment that most banks require.
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%. Credit card balances are among the factors taken into account when determining your credit score. Maintaining balances over 50% will lower your rating. You can attain lower your balances by using balance transfers to move debt from accounts with higher balances to those with lower balances, or by simply paying off some of your higher balances.
Interest Rates
Your low credit score will cut your interest rates. By doing this your monthly payments will be easier to afford and your bill will be paid off faster. Obtaining lower interest rates will make it easier for you to manage your credit, which in turn will improve your credit rating.
If you make a decent income, consider an installment account when you want to give your credit score a boost. You need to review the terms of an installment account carefully, because you’ll be required to maintain a certain monthly minimum. If you use these accounts, your score will go up rapidly.
When beginning your credit score repair journey, remain wary of companies pledging to get negative credit report entries deleted, especially if those entries are accurate. This information can stay on your record for about seven years. However, information that is not correct can be removed.
One of the first steps of improving your credit score is ensuring that your bills are always paid. More specifically, pay them on time and in full. You will immediately see changes in your credit score when you begin to pay off your debts, especially those that are active.
Be wary of credit score repair scams that can get you in legal trouble. You should steer clear of internet programs that show you how to clear your credit. It’s illegal to do this and you can get caught easily. They may seem like a small matter, but if you get caught, you could receive heavy fines and even jail time.
Credit Card
Though it is an unsettling prospect, consider asking your credit card provider to reduce the amount of credit extended to you. This will stop you from racking up giant credit card bills, and show lenders you are responsible.
If you find any errors in your credit reports, you should dispute them. Create a dispute letter for agencies that have the error, and submit additional supporting documents along with it. Your letter should be sent with a request for return receipt, so you can have a record that it was received by the reporting agency.
Try not to file for bankruptcy. It can adversely affect your credit for up to 10 years. Bankruptcy may sound great because your debt goes away but there are consequences. If you choose to file bankruptcy, you’ll be unable to get a credit card or loan in the future.
Credit Card
You need to read and understand the credit card statements you receive in the mail. Take a second look to make sure that you are being charged only for what you actually purchased. You are responsible for the accuracy of information on your credit card statments.
Put these ideas to use so you can repair your credit and stay on top of good credit practices. Having a high credit score is essential in many ways, so it is important to be well-informed about credit score repair.