You have most likely done damage to your credit, whether you got a card from friends, went on too many shopping trips or were hit by economic pressures. There are some things you can do to turn your credit around.
Getting a traditional home loan can be difficult, if not impossible, with imperfect credit. Federally guaranteed loans (FHA loans) may be an option. FHA loans can even work when someone lacks the funds for down payment or closing costs.
Improve your credit score, as well as make some profit, through an installment account. Open an installment account that you can pay for and make sure to keep an affordable monthly minimum on it. If you use one of these types of accounts, your score will quickly improve.
In order to make sure that you do not overpay, know that you can dispute your really high interest rates. It is bordering on illegal for credit card companies to charge you skyrocketed interest rates. You did sign a contract and agree to pay interest. The only way you are legally able to sue the creditors is if you are able to prove that your interest rates are much too high.
Legitimate negative credit problems can not be easily wiped away from your credit rating, so be wary of companies that promise they can do so. Unfortunately, this negative information stays on your credit record for at least seven years. If there is incorrect, negative information, you can get it removed.
Don’t risk prison. As we speak, people are trying to take advantage of illegal practices to have people create credit files that can get them into trouble. This is illegal and you will most certainly get caught. Penalties can include large fines and possibly even incarceration.
You can contact your creditors and request a lower limit. By doing this it will stabilize you in your financial boundaries instead of letting you extend beyond what you really should.
Many times you and your creditor can work together to come up with a prepayment plan. If so, be sure you get a written agreement stating the terms. You want documentation to back yourself up so there will be no problems in the future, and if the company owner changes you will have more of a chance of keeping your plan. Every time you get a debt paid off, ask the company to notify the credit bureaus.
Doing this will ensure that you keep a solid credit score. Every late payment appears on a credit report, and could potentially hurt your chances at a loan.
Lowering the balances on any currently revolving accounts will increase your credit score. Your credit score can be raised if you lower your balances. The FICO system notates when a balance on a card is at 20,40,60,80, and 100 percent of the total available credit.
Look for a credit restoration company that has good reviews online and is legitimate. Too many of these services will use your desperation to make money. Slimy operators are quite common, so beware of credit improvement scams. Be a smart consumer and educate yourself by researching user reviews online to find a good agency.
One of the most stressful aspects of handling bad credit is dealing with debt collection agencies. You have the option of sending a cease and desist letter to agencies to stop them from calling, but that doesn’t mean that your debt vanishes. A letter like this may stop a collection agency from harassing you, but you are still on the hook to pay your debts.
A nasty credit crunch can generally be caused by lacking the funds to pay off multiple debts. When you do have money to apply to your debt, spread it among all of the creditors so that each one gets a little. Even if it’s only minimum payments, send as much as you can to each creditor in order to avoid them sending your account off to collection agencies.
In order to start the process of credit score repair, it is wise to seek new credit as a way to re-establish yourself. Prepaid credit cards can help you demonstrate responsible use of credit without having to worry about missing payments or late fees. A potential lender will see this as a responsible move on your part, showing that you are credit worthy.
New lines of credit either long-term loans or a new credit card will initially lower your credit score. As tempting as it can be, do not a new credit card. If you open all these new accounts, you could see a drop in your credit score.
Seek advice from a trustworthy credit counseling service if you are having difficulty managing your debt. Many times, these agencies will negotiate with creditors to rework your debts into a manageable repayment plan so you can make progress on getting your finances back on track. Credit counseling can be a key piece in helping you understand how to budget your salary and pay your bills.
Part of having a good credit score is being timely with monthly bill payments. Setting up payment reminders can help you avoid missing a payment. There are many ways to remind yourself of impending due dates for your bills. You can set it up through online banking, a calendar or an email reminder.
Restoring your credit rating looks at first like an uphill battle, but with sound effort and the right advice, that battle can be won. Use the information you have learned here to help get you started on the journey to a better credit score.