With bad credit your options are limited, you can’t take out loan, lease a car, or do anything that requires good credit. Two of the biggest causes of low credit scores are late payments and delinquent payments. Improving your credit score can start right here, by reading the tips found in the following article.
If you have a poor credit rating, it can be extremely difficult to obtain a mortgage loan for a home. You should consider getting a FHA loan they are backed by the government. You may even qualify for an FHA loan if you don’t have enough money for a down payment or the closing costs.
Try to keep a balance of less than 50% of your available credit on all of your cards. Creditors like to see you using your accounts, but still keeping your balances under 50% of your allotted credit.
A great credit score should allow you to get a mortgage on the house of your dreams. Staying current with your mortgage payments is a way to raise your credit score even more. When you are a home owner you will be financially stable based on what you own. This will also be useful in the event that you end up needing to borrow funds.
No credit repair company can remove factual information, no matter how damaging, from your credit report. Unfortunately, negative marks will stay on your record for seven years. Incorrect information may be erased though.
When trying to repair your credit, research any credit counselors you consider using very thoroughly. Some credit counselors offer real help while others have more dubious things in mind. Other counselors are nothing more than scam artists. It is smart to verify the legitimacy of credit counselors prior to getting involved with them.
In order to start repairing your credit, you should close all but one of your credit card accounts. Make necessary arrangements to set up payments, or transfer the balance to your remaining account. Paying off one main credit card will be easier than paying off several cheaper ones.
Be certain to get any credit repayment plan in writing. This will protect you should the company change its policies. Finally, when it is paid in full, get documentation thereof to submit to credit agencies.
Try not to file for bankruptcy. This will show up on your credit for around 10 years. You may think that bankruptcy is your only option to rid yourself from debt, however look at your long term financial goals before deciding to file for it. Bankruptcy destroys your ability to get any sort of loan for at least a few years, so don’t file unless you have to.
Making your payments on time shows lenders that you are serious about maintaining good credit. Every time you make a late payment, it is logged in your credit report which can hinder your ability to take out a loan.
Carefully read the small print on your statements. Make sure the charges on your credit cards are accurate. You bear the responsibility for looking after your own best interests, and you are the only person who will know if your statement is accurate.
If you have suffered job losses due to the economy, you may not have the cash to pay all the debts you owe. Take the money you have for bills, and allocate a small amount to several creditors so you can make a little progress with each. Even if you are only making minimum payments, sending along at least a little money will mollify your creditors and prevent them from contacting collection agencies.
Build your credit back up to repair it. Prepaid credit cards can be a good way to raise your FICO score, away from the dangers of late fees or charges for exceeding your credit limit. This shows lenders that making payments is a priority for you, and that they should lend to you.
Be aware that threats made by a bill collector are illegal. Even if you are in debt, you still have rights.
If you are unable to make your monthly payments, let your creditors know, and try to work out a suitable payment plan with them. If you contact them proactively, creditors often work with you in developing payment plan that they do not report to credit bureaus. As a bonus, this will relieve a bit of financial stress, letting you target accounts where backup repayment programs are not obtainable.
Begin reducing your debt. One thing creditors will look at is what your total debt is in relation to your income. If your debt exceeds your assets and income, then most creditors will view you as being too high a risk. It’s not easy for most people to immediately pay debt off, so the best way to do it is to devise a plan and follow it.
If you ever need to get a loan for any reason, your credit score will affect your future. Even if you have bad credit, things are not hopeless. Read the tips presented here to help improve your credit scores.