Having bad credit can sometimes cause you to feel like you are a victim of circumstances. The circumstances that lead to bad credit are rarely ones you want to look back on fondly, but a low credit score provides a constant, irritating reminder. Fortunately for you, bad credit is not something you have to live with. Here are some effective steps you can take to remedy the situation.
Getting home finance can be quite tough when your credit rating is not good. Try to secure an FHA loan; these are federal government guaranteed. It might be possible to get an FHA loan even if you don’t have the money for a down payment or the closing costs involved.
If you have a card that carries a balance of over 50% of the limit, you should pay it down to below 50%. Once your balance reaches 50%, your rating starts to really dip. At that point, it is ideal to pay off your cards altogether, but if not, try to spread out the debt.
Getting an installment account can help you earn money and provide a boost to your credit. An installment account requires a monthly payment, make sure you can afford it. You can quickly improve your score by successfully managing these accounts.
If an action can result in imprisonment, draw the line. There are plenty of credit scams that purport to erase your existing credit file and create a new one. It’s illegal to do this and you can get caught easily. Legal repercussions will cost you a lot of money, and you could go to jail.
Find out how your debt settlement contract will make your credit score look. Some methods are less damaging than others; research them all before making an agreement with your creditor. Some debt settlement companies are only after profits and do not communicate the likely consequences of their methods.
Dispute any errors that are on your credit report so they are removed. Send a letter to all agencies involved. Include the errors you noted along with supporting documents that prove that the information on file is erroneous. Also include a request for a return receipt to make sure the agency gets it.
Look through your credit card statement each month and make sure that it is correct. You don’t want them reporting these to the credit reporting companies, so you’ll need to contact them immediately if there are.
Try not to file bankruptcy if at all possible. Bankruptcies appear on credit reports for ten years. It may seem like the right things to do, but your future will be affected. Once bankruptcy has been filed, it could permanently halt your chances of ever obtaining credit again in the future.
In order to start repairing your credit, you should try to pay down the balances on your credit cards as quickly as possible. Pay off high-interest debt first, as it grows the fastest. This can prove to creditors that you are serious about paying down your debt.
Carefully read all of your credit statements. You want to double check that all the charges are accurate, and that you are not paying for something you did not purchase. You are the only person that is responsible for making sure the statements are error free.
When working with a credit repair agency, it is imperative to find one that is legitimate. There are a lot of credit score improvement agencies that you will want to avoid. It is sad to see how many people have been taken advantage of by credit repair scams. You can separate the scam artists from the good agencies by relying on user reviews found online.
There are many law offices that promise quick credit fixes; avoid these. Predatory lawyers have begun to prey on people with credit problems; they charge outrageous fees to repair credit. Investigate a lawyer before hiring them to help you in repairing your credit.
It can be terrible to deal with having multiple different debts that you are unable to pay. To make sure everyone gets a share, spread out your money distribution. Paying each creditor something, even less than the minimum payment due, can usually appease your creditors enough that they will not turn your accounts over to collection agencies.
When you do not have good credit, you will not feel so good about your financial status and you might think it could never improve. The following tips will help you repair your credit and get you to think more positively about your financial situation.