Debts that you may have forgotten about or been unaware of can seriously hurt your credit. Now that you are seriously in debt, you need to work extra hard to repair your poor credit. The following advice is easy to put into practice, so read it and then put it to use.
Getting home financing is no small feat, especially if your credit score is less than perfect. FHA loans are good options in these circumstances, because the federal government guarantees them. FHA loans offer lower down payments and help with closing costs.
If you are unable to get an unsecured credit card due to your low credit rating, consider a secured card to help reestablish your rating. With a secured card, you have to fund your account before you use the card so that the bank will be assured that you will pay off your debts. Even though this card will be secured by your own money, you will make payments and manage it as if it were unsecured. This will improve your credit as you show yourself able to make the payments on time.
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%. Your credit score can diminish with balances over 50%, so spread out the debt or pay off the credit cards.
With a good credit score, you can easily buy a house and mortgage it. When your mortgage is paid in full, you will be rewarded with increased scores on your credit file. Owning a home shows financial stability, which is great for your credit. Having a good credit score is a key factor if you ever need to take out a loan.
When trying to rehabilitate your credit, it is important to work with each credit card company you are indebted to. If you do this you’ll find that your debt doesn’t increase and your credit is improved. You can do this by speaking with them and asking to change the monthly charges or due date.
Before you choose a credit counseling agency, find out more about them. While some counselors are legitimate, offering genuinely helpful services, others have ulterior motives. Some will try to cheat you. Smart consumers make sure that a credit counselor is legit before starting to exchange any money or sensitive information.
If you find any errors in your credit reports, you should dispute them. Gather your support documents, make a list of the errors, and compose a letter to pertinent agencies. Send your dispute package with a return receipt request so that you have proof that it was received by the agency.
It will be easier to increase your credit rating if you only have one open credit card account. It is important to make small payments or transfer a balance to the open account. You will be able to pay one bill instead of a plethora of small ones.
Take a look at credit card bills to make sure that every item is one you have charged. Contact the credit card company right away if there are incorrect fees, so that they won’t be on your credit report.
If a creditor agrees to give you a payment plan, get that payment plan in writing. Any plan that you agree on should be put in writing and signed by both parties to protect you in the future. Every time you get a debt paid off, ask the company to notify the credit bureaus.
This is the first step toward having an A+ credit rating. Late payments are reported to all credit report companies and will greatly decrease your chances of being eligible for a loan.
When you receive a credit card statement you should immediately look at the statement. Really analyze the purchases on your card to make sure you are not receiving any errant charges for items you never purchased. It is only your responsibility to make sure everything is correct and error free.
To accomplish getting a better rating on your credit, pay down the balances of your current accounts. Having a lower balance will boost your credit score. The FICO system makes a note to your credit report every time your account balance reaches a new 20% increment of your total available credit.
Only work with legitimate credit repair companies. There are a lot of credit repair agencies that you will want to avoid. A fair number of people have been scammed by these unethical credit repair companies. You can separate the scam artists from the good agencies by relying on user reviews found online.
In truth, as you will see, credit repair is mostly about common sense. You can find those waters by sailing with these tips.