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 good news is that there are some things that you take steps to begin to repair your credit.
Financing a home can be difficult if you have bad credit. Federally guaranteed loans (FHA loans) may be an option. FHA loans are also great when a borrower doesn’t have the money to make a down payment or pay closing costs.
Credit Card
Planning is the first step to repairing your credit. You need to change your past habits and build new, better approaches to credit. Only the necessities can be purchased from here on in. Ensure that you can afford everything you buy and that you really need it.
If you can’t get a normal card due to low credit score, applying for a secured credit card is an option. If you utilize a credit card responsibly, it will help improve your credit standing.
There are secured credit cards available if your credit rating is too low to open up a regular credit card account. These types of credit cards often require a good faith deposit to open a new account. If you show a good history of payments with this card, it will help improve your credit standing.
You may be able to reduce your interest rate by maintaining a high credit rating. This should make your payments easier and allow you to pay off your debt a lot quicker.
If you have credit cards where the balance is more than half of your credit limit, pay these down right away. If you have a balance that is more than 50 percent, your credit score will drop. If you can, pay the balances on your cards; if not, do your best to pay as much as possible each month.
Try an installment account. You can quickly improve your score by successfully managing an installment account.
Opening up an installment account will help you get a better credit score and make it easier for you to live. Make sure that you are able to afford the payments on any installment accounts that you open. If you can manage one of these accounts, your credit score should improve quickly.
Interest Rates
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. Creditors who charge exorbitant interest may be just a law suit away from having to wipe the slate clean. However, you agreed to pay the interests off when you signed the contract. Be very wary of suing your creditors, especially if all of your issues were covered in the contract.
You can lower your debt by refusing to acknowledge the part of your debt that has been accrued by significantly high interest rates if you are being charged more than you should be. Creditors are skirting a fine line of law when they try to charge you with high interest rates. You did however sign a contract saying that you will pay off all interests as well as the debt.You need to be able to prove the interest rate charged exceeded your state’s statutory limits.
When looking to improve your credit, avoid companies claiming that they can remove negative information if the debt is true. Unfortunately, negative marks will stay on your record for seven years. You should know that mistakes and anything incorrect can be removed from your credit report.
If someone promises you to improve your score by changing your factual history, even those properly reported. Negative credit information remains on your history for a minimum of seven years!
Try joining a credit union to begin a credit score. Credit unions have opportunities that are better than other places and are usually local.
Give your credit card company a call and ask them to lower your credit card. Not only can this tactic prevent you from getting yourself in over your head with debt, but it will be reflected in your credit score because it shows that you are responsible with your credit.
Try to pay down all of your debts until you’re only carrying a balance on one. You should plan on how you will pay the remaining open balances, or how to consolidate them into one account. It will be easier for you to make payments on a single credit card account, as opposed to several.
If you have bad credit, close all old accounts except for one. You should arrange to make payments or make a balance transfer balances to your open account. This will let you focus on paying off one credit card bill rather than many smaller ones.
Bankruptcy should only be viewed as a last resort option. Filing bankruptcy negative effects your credit score for 10 years. 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. It may be hard to get a credit card or a loan if you declare bankruptcy.
If you want to fix your credit it can seem like a lot to handle, if you work hard you can do it the right way. Apply the knowledge from this article in order to assist you in repairing your credit score.
Pay off your entire balance on your credit card in order to repair your credit. Pay down your cards that have the highest interest and largest balances first. This will show future creditors that you take your debts seriously.
