It can be very difficult to secure a loan or lease a vehicle if poor financial decisions have resulted in a poor credit score. If you don’t pay your bills and fees on time, your credit score will suffer. If you need to fix your bad credit rating, read the tips presented here to get out of the hole.
If your credit is not perfect, getting a mortgage can be tricky. If possible, apply for an FHA loan; these loans are backed by the United States government. FHA loans are a good option regardless of your down payment amount or funds available for closing costs.
Secured Credit Card
A secured credit card might be a good option for the person with a poor credit score. These are extremely easy to qualify for. A secured credit card looks just like a regular card, and works like a regular card, but you have to have the necessary money in an account to guarantee payment. A new credit card, used responsibly, will help repair your credit rating.
Any of your credit cards with balances that are above 50% of your overall limit need to be paid off as soon as possible, until the balance is less than 50%. You should keep your balances under fifty percent; anything over this and you can lower your credit rating, so spread out the money you own and pay down your credit cards.
Do not fall for the false claims many have about their ability to fix your credit. The claim that they can remove accurate debts from your credit report is false. Negative entries on your record stick around for a term of seven years at a minimum, even if you take care of the debts involved. Items that you can get taken off your record are those that have been reported incorrectly or unfairly.
Contact your creditors to request a reduction in your credit line. Not only will this prevent you from owing more, but it will be reflected in your credit score because it shows that you are responsible with your credit.
Before agreeing on settling a debt, find out how if the process will raise or lower your credit score. There are methods that are going to be less damaging than another, and all should be researched before you enter an agreement with a creditor. Some are out there just to take your money; they don’t care about your rating.
Don’t spend more than you make each month. You need to change your thinking to consider your future goals, not just buy all of the things you want right now. Unfortunately, credit has been easier to get than ever. Many people are buying things that are unaffordable and end up paying more than they should for any item. Examine your finances and make wise decisions about how much you should be spending.
Try to pay down all of your debts until you’re only carrying a balance on one. Then, try to arrange payments or transfer your balances to the one account you left open. It is much easier to manage one large monthly payment than it is to keep track of multiple smaller ones.
Do not file for bankruptcy. Filing bankruptcy negative effects your credit score for 10 years. It sounds very appealing to clear out your debt but in the long run you’re just hurting yourself. Most lenders will be hesitant to work with you in the future when a bankruptcy shows on your credit report.
Comb through all of the bills that you get! Ensure that all of the listed charges are purchases that you made, keeping an eye out for fraudulent charges. The responsibility lies with you to verify that each charge is accurate.
Credit scores affect anyone who wants to get a loan or even co-sign for a child’s student loans. Your low credit score can be improved through the tips listed here, even if you’re in debt.