Having a poor credit score is among the most frustrating situations that takes the fun out of life. Your financial options will diminish, fewer options will be open to you and you will not be able to take advantage of new credit line offers. Here are a few easy tips on how you can fix your credit and make sure it stays positive in the future.
Financing a home is not always an easy task, especially when you have less than perfect credit. FHA loans might be a good option to consider in these circumstances, as they are backed by our federal government. Even when the resources for making down payments or paying closing costs are lacking, FHA loans can help.
If your credit is top-notch, getting a mortgage is a simple matter. If you wish to have an even higher credit score, make sure that you pay your house mortgage off on time. Owning a valuable asset like a house will improve your financial stability and make you appear more creditworthy. This is helpful in case you want to borrow money.
A good tip is to work with the credit card company when you are in the process of repairing your credit. When you work with company you are not working against anyone, including yourself. This will help prevent furthering yourself into debt. See if the company will allow you to modify the monthly due date, or reduce the payments.
When trying to repair your credit, research any credit counselors you consider using very thoroughly. Although some credit counselors are truthful and legitimately helpful, other credit counselors are not honest and upfront with their motives. Others are outright scams. You should research any counseling service you are considering prior to initiating communications with them.
Look through your credit card statement each month and make sure that it is correct. If there are late fees you don’t deserve, act as soon as possible to get the matter resolved before it can affect your credit score.
Filing for bankruptcy is a bad idea. When you file for bankruptcy it shows for 10 years, your credit report will suffer from this. It may seem like the right things to do, but your future will be affected. Most lenders will be hesitant to work with you in the future when a bankruptcy shows on your credit report.
Make sure that you pay more than the minimum balance owed on all of your credit cards to improve your credit. Work on paying off credit cards that have the highest interest rates or high balances. This will show responsibility to creditors.
Go through all the statements you receive. Take a second look to make sure that you are being charged only for what you actually purchased. You are the only one that can verify if everything on there is the way it should be.
To increase your credit score lower the amount owed on revolving accounts. You could increase your credit score just by paying down some balances. The FICO system has a new level for every twenty percentage points of your credit available.
Make sure that the credit improvement agency you choose to work with is reputable. There are a number of shady operators in the credit improvement business that can cost you money and do nothing for you. There are many people who have been the victim of a credit restoration scam. Reading online reviews will help you to choose a decent credit score repair company.
Try not to use your cards at all. Pay for things with cash whenever possible. When you do use a credit card, pay off the balance in full each month.
Be aware that opening a new credit card account can affect your credit score in a negative way. Fight the overwhelming urge to say yes to a new credit card when it is offered to you at store checkouts, even if there is a large discount offered. Credit scores typically drop when new credit is opened.
Work out a plan of attack where you can pay off collectors and any other accounts that are past due. They will likely still appear on the credit bureau report but having them marked as paid is a lot better than having them appear as outstanding balances.
Be aware that threats made by a bill collector are illegal. You are protected by law, and you need to know that.
Begin reducing your debt. Creditors take into account your income and they compare it to your total debt. If you owe too much in comparison to your income, you will be seen as a bad credit risk. The average person can not pay off their debt immediately. A good payment plan is essential to get any debt paid off as soon as possible.
Go through your credit report to make sure everything is right. Mistakes or errors in your file can cause issues for your credit. You are allowed to dispute information that is incorrect, and while the process will take some time, the errors will be removed.
If you are engaged in a dispute over information on your credit report, you must maintain accurate and thorough records of the dispute. Make note of every call or letter you send or receive. Send your dispute letter as certified mail so you can prove it was received.
Always make payments on time to help increase your credit score and clear up your debt history. Even if it’s just the minimum, make sure you send a payment. Just one payment missed can do a good deal of harm to your credit.
Having read these simple tips, the only thing left now is to apply them. A good credit score is essential to financial freedom, take the time to learn about fixing your credit.