Having bad credit can sometimes cause you to feel like you are a victim of circumstances. You may have gone through bad life experiences or made simple mistakes, and a poor credit score can remind you of that bad time, making it hard to move forward. Fortunately, there are things that you can do to repair your credit and the information below may be able to help you do just that.
Fixing credit reports must begin with a solid working plan that you are capable of adhering to. Real changes come from commitment to healthy spending habits. Sticking to necessities for a while is crucial. If the thing you’re looking at is not both necessary and within your budget, then put it back on the shelf and walk away.
If your credit card is carrying more than half of its credit limit, your first priority should be paying it down until it is below 50%. Your credit score can be negatively impacted if you are carrying a large balance compared to the available credit you have. While you are paying off these cards, reduce the balance to a small percentage of your available limit.
If you don’t have very good credit, financing your home may not be easy. 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. Some FHA loans even cover a down payment or your closing costs.
Credit score improvement requires that you begin paying your bills. Your bills must be paid completely and on time. Once you start paying your past bills off, you will notice an immediate improvement in your credit.
If an action can result in imprisonment, draw the line. Scams abound on the internet that show you how to change your credit file. These scams are not legal and there will be repercussions. They may seem like a small matter, but if you get caught, you could receive heavy fines and even jail time.
Call each of your charge card companies and ask them to lower the limit on them. This helps you from overspending and shows that you want to borrow responsibly and it will help you get credit easier in the future.
If you make a decent income, consider an installment account when you want to give your credit score a boost. When opening an installment account, you need to make a monthly payment, so get something you can afford. You can improve your credit rating quicker using this type of account.
If you find any errors on your credit reports, dispute them. A dispute letter should be sent to any of the agencies that are reporting the error. Be sure to include supporting documents. Send any correspondence by recorded mail to ensure proof of receipt by the agency.
Live within your means. This takes a real mindset change. The rise of consumer credit in the past few years has made it far too easy to buy items without being able to pay, and the bills are coming due. Examine your finances and make wise decisions about how much you should be spending.
Legitimate negative credit problems can not be easily wiped away from your credit rating, so be wary of companies that promise they can do so. Unfortunately, this negative information stays on your credit record for at least seven years. But, you should remain mindful of the fact that errors can be deleted from your report.
Examine your credit card charges monthly to ensure they are correct. Contact the credit card company right away if there are incorrect fees, so that they won’t be on your credit report.
If you and your creditor decided to set up a payment plan, you should first get the details of the plan in written form. You need to have a contract in writing so if the creditor goes belly up or they change your terms, you can catch them on it. Once it is paid off, you should get that in writing to send to the credit reporting agencies.
Joining a credit union may be helpful if you want to work on improving your credit score and are finding it difficult to access new credit. They may offer better rates and more credit due to local conditions as compared to national ones.
Avoid filing for bankruptcy. Bankruptcy will be noted on the credit report for 10 years, afterwards you must rebuild from scratch. Though it may seem necessary at the time, you should weigh the costs over the next ten years before you decide to go through with the filing. Most lenders will be hesitant to work with you in the future when a bankruptcy shows on your credit report.
Some of the worst stress you experience with bad credit is caused by debt collection agencies. A consumer has the legal option of using cease and desist letters to dissuade collection agencies, but it is vital to keep in mind that C&D letters only stop harassment. Remember, even when the debt collectors stop annoying you by phone, your obligation to pay what you owe is not alleviated.
Don’t believe the hype of lawyers or other offices that promise they can immediately fix your credit score. Due to the huge amount of people with credit problems, lawyers have emerged and offer to repair credit for a huge fee, and most of the “repair” is illegal or useless. Check up on the track record of any lawyer whose credit advice you intend to seek.
Start living within your means. This is nothing short of a lifestyle overhaul. 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. Take a hard honest look at your budget, and figure out what you can honestly afford to spend.
Every time you open a new line of credit your credit score is going to suffer. Resist the urge to sign up for credit cards even when they promise you instant savings at the checkout. If you fall for the temptation, your credit score will drop when opening that new card.
Find a reputable, no-cost credit counseling agency to help you if you find budgeting and paying debts off to be hard or confusing for you. Many times, these agencies will negotiate with creditors to rework your debts into a manageable repayment plan so you can make progress on getting your finances back on track. A credit counselor can give you the best advice on how to be in control of your finances, and pay off your debts.
You need to read and understand the credit card statements you receive in the mail. Check to be sure that you actually purchased the things that are listed on your statement, so that you are only paying for things you bought. You are responsible for the accuracy of information on your credit card statments.
Get rid of your debt! When creditors are assessing your risk, they want to see a high income to debt ratio. If you have more debt than your income allows you to pay, you are a credit risk. Since it will likely take a while to get rid of your debts, write a plan for decreasing your debt gradually, and follow it.
It is easy to get down on yourself when your credit score is low. Following these credit score repair tips can inspire you to think differently and to take charge of improving your credit.
Unfortunately, no financier is going to be interested in the statement you provide when they are examining your credit history. The less you can do to attract attention to negative reports, the better.