If your credit is bad, it may seem tough to find the right places to turn to for credit restoration. There is a wealth of information that can help you rebuild your credit. Apply these tips for efficient strategies.
Having poor credit makes financing a home a nightmare. There is, however, alternative types of funding available that are offered by the banks. FHA and USDA are two such agencies who offer finance to those with lower credit scores, sometimes with low down payment and closing cost clauses. You may even be able to secure your down payment and closing costs through an FHA loan. It depends on if you qualify.
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%. 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.
It is easy to get a mortgage for a house if your credit score is good. Paying mortgage notes on time will keep your credit scores high. Owning a home gives you secure financial assets. This will be beneficial when you apply for loans.
Excessive interest rates can be contested. However, it is best not to sign contracts containing them in the first place. Some companies that charge high interest rates are running the risk of having those rates challenged by consumers. However, you did sign an agreement to pay the interest. It is likely you can have exorbitant interest rates reduced if you sue the creditor.
Negative-but-correct information cannot be removed from your credit report, so be wary of promises from unscrupulous companies who promise to remove it from the credit reporting agencies. Unfortunately, negative marks will stay on your record for seven years. You can erase information that is incorrect from your credit record.
Work closely with all of your creditors if you are aiming towards repairing your credit. This will help you stabilize your situation and start working towards a better financial situation. One way to tackle this problem is to call them and ask if you can have the due date or monthly charge amount changed.
Do not involve yourself in illegal activities. There are various online scams that involve creating a fresh credit file. Doing this is illegal, and you will be caught. The legal consequences are expensive, and you might be sentenced to jail.
Give your credit card company a call and ask them to lower your credit limit. Doing this keeps you from overtaxing yourself. It also shows the lending company that you are responsible.
Check any negative items on your reports carefully when you begin fixing your credit. The debt itself may be legitimate, but if you find errors in its metadata (e.g. the date, amount, creditor name), you might be able to get the whole entry deleted.
If you notice credit reporting errors, always file a dispute. You should contact the credit bureaus both online and by certified letter; be sure to include proof of your claims. Ask for a return receipt so that you can prove that the agency got your package.
Do not use credit cards to pay for things that you simply cannot afford. This might be a tough thing to get your head around. In the not too distant past, credit was easy and people could stretch themselves too far, but now the economy is paying the price of those days. Review your budget and look at what you can spend each month without using more money than you have coming in.
If you work out a payment plan with a creditor, you should make sure to get the plan in writing. If the creditor tries to change the agreement or if it the company is sold to someone else, you will have documentation to support your case. After you have paid the debt off completely, keep your receipt in case there are any discrepancies on your credit report.
Do not file for bankruptcy. Bankruptcy will be noted on the credit report for 10 years, afterwards you must rebuild from scratch. 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. If you choose to file bankruptcy, you’ll be unable to get a credit card or loan in the future.
Hopefully you have discovered information pertinent to your case. At first you may be daunted by the process, but the benefits of using the tips given will make it worthwhile. Remain patient and give the process time to work. If you keep at it, you will have awesome credit again in no time.