Bad credit is an unfortunate detour on the road of life. Bad credit and keep you from great opportunities as they arise. Yet, some simple steps can fix your credit and help you to keep your credit in good standing.
For some it may hard to finance their home due to having less than ideal 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. You might be able to get an FHA loan even if you cannot afford closing costs or down payments.
Planning is the first step to repairing your credit. You must make a commitment to making changes on how you spend money. Purchase nothing but the essentials. Put each potential purchase to the test: is it within your means and is it something that you really need?
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%. Any time you exceed 50% of your credit limit, your credit rating is affected. Pay off credit cards as fast as you can, or spread the debt out further.
Excessive interest rates can be contested. However, it is best not to sign contracts containing them in the first place. It is important to know the terms of your original agreement for the debt you incurred. Usually if you agreed to the terms the terms will be upheld as legal. If you believe the charges are excessive and your debtor will not negotiate down the interest and other additional charges, state laws might provide you with additional avenues to pursue a reduction in these charges. Federal law provides that when you are billed by a collection company the fees and interest cannot exceed the amount of the original debt. You did however sign a contract that agrees you will pay off all interests as well as the debt. You may wish to make a legal claim that the interest rate charged exceeded your state’s statutory limits.
You should consider talking to directly with your creditors when you are trying to improve your credit. Doing so will help you to ensure that you do not go further into debt and make your credit worse. Some of your options include negotiating for a later due date, and asking for reductions in your minimum monthly payments.
If you are looking into a credit counselor, be sure to find out information about them before you choose to use them. Many counselors are honest and helpful, but others may be less interested in actually helping you. Some will try to cheat you. You should always find out if a credit counselor is the real thing.
Requesting that your credit card limits be lowered can benefit you. You will not be able to spend too much and they will see that you are responsible.
Credit unions are an option for those who have run out of options when trying to find a line of credit to boost their score. With help from a credit union you might get better rates than at another bank, since credit unions better understand the current area compared to the national situation.
If you find inaccuracies on your credit report, make sure to dispute them. Write a dispute letter to any agencies with recorded errors, and include supporting documents. Use a return receipt when you mail your package so that you can prove that the agency received it.
If you and your creditor decided to set up a payment plan, you should first get the details of the plan in written form. This is for your protection. It allows you to have valid documentation of the terms in the event that a creditor reneges on its offer or changes owners. Once you make the final payment, get a statement that verifies that the debt has been satisfied and send it to the various credit reporting agencies.
Simple tips like these will help you fix your credit problems and keep your credit healthy. Good credit is important, so it’s important that you learn a great deal about credit improvement.