You need not suffer the effects of bad credit, no matter how you wound up with credit problems. Whether you have been personally damaged by economic conditions, victimized by dishonest lenders or even were simply too carefree in your spending, you deserve better credit. Luckily, there here are some steps that you can take to turn things around.
Financing a new home can be a challenge, especially if you have a history of bad credit. Try to secure an FHA loan; these are federal government guaranteed. FHA loans are also great when a borrower doesn’t have the money to make a down payment or pay closing costs.
If you have a poor credit history and can’t qualify for a credit card, get a secured card. In order to get the card, you will have to fund the account as sort of an insurance that shows the bank your debts are going to be paid. If you show a good history of payments with this card, it will help improve your credit standing.
You must pay your bills consistently if you want to repair your credit. However, it’s not enough to just pay your bills; you need to make your payments on time and in full. When you pay off past due lines of credit your credit score will go up.
Don’t get involved in anything that could get you arrested. A common scam involves teaching you how to make a completely new, albeit fraudulent, credit file. Do things like this can get you into big trouble with the law. In addition to the possibility of facing jail time, you could be fined, your attorney bills may be substantial, and your reputation could be ruined.
Make sure you review all of the negative marks against you on your credit report. If you notice a mistake on your report, you could get some items crossed off. Even if the item itself is right, an error in the date or amount gives you the right to contest it.
Bankruptcy should be a last resort. This negative mark will stay on your report for 10 years. Though the idea of ridding yourself of debt can sound appealing, the long term consequences just aren’t worth it. By filing for bankruptcy, you might have a lot of trouble getting a credit card or qualifying for a loan in the future.
Doing this will ensure that you keep a solid credit score. Every late credit card payment can damage your credit score.
Lowering the balances you carry on revolving accounts can improve your credit score. Your credit score can be raised if you lower your balances. Your FICO credit score notes what your balances are on your revolving accounts based on the credit you have available.
If you want to repair your credit, take the time to find a reputable repair agency. The industry unfortunately has some agencies that fall short on their credit repair promises. Lots of people have been taken in by credit score improvement schemes. If you do some online research, you can find out what people really think about the various credit improvement agencies. This will help tremendously in choosing a safe and effective company.
Having to deal with a collection agency can be extremely stressful. If a debt collection agency is harassing you, writing a cease and desist letter can stop the harassment. Even when the phone calls from collection agencies have stopped, the associated debts must still be paid.
When you need to repair your credit score, be wary of lawyers and law offices that advertise instant credit fixes. Because so many people are experiencing credit problems due to the economy, shady lawyers that advertise useless, possibly illegal credit score improvement services have appeared. Do a thorough background check on any lawyer advertising credit restoration services before handing over any money.
You may get into the situation that you have multiple debts and you just don’t have enough money to pay them all. Be sure to give a portion of your spendable income to each of your creditors. Minimum payments will keep your debt accounts in good standing, and will keep them from ending up in collections.
Work out a plan of attack where you can pay off collectors and any other accounts that are past due. These will remain on the credit report, but will be reported as paid. This is better than having past due debt.
Repairing the credit you damaged might seem overwhelming, but you can fix your credit with effort and the right kind of information. Use the information you have learned here to help get you started on the journey to a better credit score.