Nowadays, millions of people have bad credit scores due to a number of things, such as job losses and a higher cost of living. Fortunately, these tips and tricks will provide useful insight into ways that you can work toward a healthier credit score.
For some it may hard to finance their home due to having less than ideal credit. If your income is a factor you may qualify for a FHA loan, which has lower standards and makes the federal government your lender in a sense. FHA loans are ideal for those who cannot afford the high down payment that most banks require.
Develop a plan that works if you are in need of credit score repair. You need to make a commitment to changing your spending habits. Avoid buying what you don’t need. If you are buying something because you want it, and don’t need it, put it back on the shelf.
You can receive a better interest rate if you have excellent credit. A lower interest rate means lower monthly payments, and less time paying off your debt. Getting better interest rates leads to an easily maintainable good credit score.
If you find that you have a credit card and the interest rate has gotten to high, you do have the option to not pay the debt, though there will be consequences. The incredibly high interest rates can get challenged and reduced in some situations. However, you signed a contract agreeing to pay off interests. Should you sue any creditors, it is important to push the fact that the interest rates are outrageously high.
When trying to improve bad credit, beware of companies who promise that they can erase any negative, but correct items, on your credit report. Unfortunately, negative marks will stay on your record for seven years. It is possible to have erroneous information removed from your report, however.
To start fixing your credit, you will have to pay your bills. You must pay them on time and in full. Getting rid of past-due bills will have a fast and dramatic effect on your credit score.
When you want to rebuild your credit, take a close look at any negative reports that are harming your credit. The debt itself may be legitimate, but if you find errors in its metadata (e.g. the date, amount, creditor name), you might be able to get the whole entry deleted.
If you find a mistake on your credit report, be sure to dispute it! Compose a letter of dispute to every agency that reported errors, and include as much documentation as you can. When you mail your dispute package, be sure to make arrangements for confirmation of receipt. In this way, you will have documentation that your information has been received.
Try not to file for bankruptcy. When you file for bankruptcy it shows for 10 years, your credit report will suffer from this. 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. Filing bankruptcy makes it difficult if not impossible to get anything involving credit, like credit cards and loans, in the future.
Keep your credit cards in your wallet. Cash payments are preferable. If you have no choice but to use a credit card, always pay the balance in full each month.
Debt Collection Agency
Dealing with a debt collection agency is one of the most traumatic parts of a financial crisis. If a debt collection agency is harassing you, writing a cease and desist letter can stop the harassment. Although these letters make collection agencies cease contacting people, they are still expected to pay their debts.
If you need to rebuild your credit, you need to start establishing a history of responsible borrowing. Prepaid credit cards help you re-establish credit without the risk of falling into an even deeper hole due to delinquent payments. Potential lenders will see this as a positive thing as it will show you are a responsible person.
Since you should now have a better understanding of different ways you can use to begin fixing your credit scores, take immediate action to implement them. Don’t let your credit score ruin your life; instead use this information to begin repairing the damage.