If you knew exactly the amount and to whom you owed the money, you might not have been in debt to begin with. But it is never too late to put an emergency strategy into action to help get your credit score on the right track. The tips in this article will help you repair a low credit score.
Getting home finance can be quite tough when your credit rating is not good. If this is the case, try to get an FHA loan, which are loans backed by federal government. FHA loans are also great when a borrower doesn’t have the money to make a down payment or pay closing costs.
If you want to fix your credit, you must first conjure a workable plan that you can stick to. You must be committed to making real changes in the way you spend money. Only buy what you absolutely need. Ask yourself how necessary each purchase is, and how affordable it is too. If you can’t answer “yes” to each of the questions above, you need to reconsider the purchase.
You may be able to get a secured credit card even if your poor credit has prevented you from getting other credit cards. This card is very easy to get, because you put money into an account ahead of time and then spend from that, so the bank doesn’t have to worry about not getting their money. If you show a good history of payments with this card, it will help improve your credit standing.
You can dispute inflated interest rates if you are being charged more than you should be. The incredibly high interest rates can get challenged and reduced in some situations. However, you agreed to pay the interests off when you signed the contract. If you choose to bring a lawsuit against your creditors, use the high interest rates against them.
Though it is an unsettling prospect, consider asking your credit card provider to reduce the amount of credit extended to you. This will stop you from racking up giant credit card bills, and show lenders you are responsible.
Before going into debt settlement, find out how it will affect your credit score. There are methods that are going to be less damaging than another, and all should be researched before you enter an agreement with a creditor. Remember creditors want their money. They really don’t care about your credit scores. That is up to you to protect.
Officially dispute any errors you find on your credit reports. Write a dispute letter to any agencies with recorded errors, and include supporting documents. Make sure that you send the letter via recorded delivery, so that you can prove that the credit agency receives it.
Shut off all but one credit card if you want to fix your credit. Transfer your balances to this one card, with the lowest interest, if this is possible. Instead of paying several smaller credit card bills, you can work to pay off one credit card.
Any time you establish any payment plan with any creditor, make sure you get it in writing. Any plan that you agree on should be put in writing and signed by both parties to protect you in the future. If you have finished paying it off, you should request a confirmation so you can send it to the credit reporting agencies.
Doing this will ensure that you keep a solid credit score. Every late payment appears on a credit report, and could potentially hurt your chances at a loan.
Try to avoid using credit cards. Try to use cash when purchasing. If you have no choice but to use a credit card, always pay the balance in full each month.
Make out a plan or program to pay off past due accounts and collection agencies. 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.
As this article indicates, paying off your debts and raising your credit score require a pragmatic approach more than anything else. If you follow some sound advice and use common sense, you can be on your way back to good credit.