Whether you fell prey to the guys handing out credit cards like candy on campus, got carried away on one too many shopping sprees or got hit hard by the recent economic downturn, you’ve probably damaged your credit. The following tips will help you take steps to begin to repair it.
The first thing you should do when trying to improve your credit is develop an effective plan and make a commitment to adhere to it. You can’t just make up a plan and not change how you spend your money. You should only purchase the necessities, and skip the impulse buying. Only buy something if you have to have it and you can afford it.
Financing a home can be made more difficult when your credit score is low. If possible, try to get a FHA loan because there is a guarantee that it will be given to you. FHA loans offer lower down payments.
The first thing you should do when trying to improve your credit score repair is to build a commitment to adhere to it. You need to make a commitment to changing your financial situation. Only buy the things that are absolutely need.
Your low credit score will cut your interest rates. By lowering your monthly payments, you’ll be able to reduce your debt more quickly. Obtaining lower interest rates will make it easier for you to manage your credit, which in turn will improve your credit rating.
If you have credit cards with a balance that exceeds 50% of your credit limit, then pay them down until they are below 50% utilization.
Interest Rates
It is essential to pay all of your bills if you are looking to repair your credit. You should always make an effort to pay your bills on time and in full. Once you start paying your past bills off, you will notice an immediate improvement in your credit.
You can dispute inflated interest rates. Creditors are skirting a fine line of the law when they try to charge you exorbitant interest rates. You did sign a contract that you would pay off the debt. You may wish to make a legal claim that the interest rate charged exceeded your lenders.
If a company promises that they can remove all negative marks from a credit report, this is a scam. Negative info stays on your record for seven years.
Make sure you research a credit counselor before you visit them. Many counselors are on the up-and-up and are truly helpful. Others just want to take money from you. There are a lot of people out there that are trying to take advantage of those who are down on their luck. You should research any counseling service you are considering prior to initiating communications with them.
You must pay your bills off on time and in full. Your credit score will begin to increase if you pay the bills that are consistently paying back your debts.
Make sure you thoroughly research into any credit counseling agency or counselor before you do business with them. Many may have ulterior motives, but others may be less interested in actually helping you. Some credit services are just people trying to scam you.
If you come across a mistake on your credit report, don’t hesitate to dispute it. Write a dispute letter to any agencies with recorded errors, and include supporting documents. Send any correspondence by recorded mail to ensure proof of receipt by the agency.
Do not involve yourself in jail. There are schemes online that claim they can help you how to establish an additional credit profile. Do not attempt this can get you will not be able to avoid getting caught. You could go to jail if you are not careful.
Credit Score
If you work out a payment plan with a creditor, you should make sure to get the plan in writing. The documentation you gain from the creditor is important in case the company changes ownership or the creditor is no longer interested in the deal. When the debt is eventually paid or settled in full, you should request documentation of this and forward copies to the primary credit reporting companies.
Some settlement agreements can actually be bad for your credit score, so make sure you are achieving the best outcome for you before you sign anything. Creditors just want their money that you owe them and really aren’t interested on how that hurts your credit score.
With some hard work and guidance, you can easily fix your damaged credit and help receive the rating that you deserve. With the tips above, you are better prepared to take action and get your credit situation back where it should be.
Be very careful about credit professionals who state that they could fix your credit quickly. Because so many people are experiencing credit problems due to the economy, shady lawyers that advertise useless, possibly illegal credit repair services have appeared. Before you give a lawyer any money or any personal information, make sure to do a thorough check on them and their practice to make sure they are legitimate.