Has your bad credit been giving you problems? Due to the current economic conditions, the credit scores of many people are dropping. This article will teach you how to protect and improve your credit.
If you are buying a home it will not always be easy, and even more difficult if your credit is bad. 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 even apply for someone who doesn’t have closing costs or the funds that are needed for down payment.
If you can’t get a normal card due to low credit score, look into a secured card. These types of credit cards often require a good faith deposit to open a new account. If you utilize a credit card responsibly, it can aid in the repair of your credit rating.
If you have to improve your credit, make a solid plan and follow it. You must be dedicated to making some significant changes in the way you spend your money. Avoid buying what you don’t need. Before making any purchase, determine if it is within your means and if it is indispensable. Don’t buy the item unless you answer “yes” to both of these questions.
Credit Score
If your credit is good, it’s easy to get a mortgage on a new home. You will get a better credit score by paying your mortgage payment on time. Home ownership also means you have assets that you can rely on to increase your credit score. Financial stability is important should you need a loan.
No credit restoration company can remove factual information, no matter how damaging, from your credit report. This information can stay on your record for about seven years. You can erase information that is incorrect from your credit record.
Any credit cards that have balances over 50% of your limit should be paid off until they are less than 50% of your limit. Carrying a balance of more than half your credit limit negatively impacts your credit score. Either pay this balance down or spread it out over multiple cards.
Make sure to have as low as possible of a credit line available to you. It will pay off in lowering the risk of excessive borrowing and reflecting good financial decision making on your behalf.
Anything on your credit report that you feel is inaccurate should be disputed. You should contact the credit bureaus both online and by certified letter; be sure to include proof of your claims. Make sure when you send the dispute package that you request proof by signature that it was received.
It is important to get any payment plan that you agreed to with a creditor in writing. You want documentation to back yourself up so there will be no problems in the future, and if the company owner changes you will have more of a chance of keeping your plan. After you have paid the debt off completely, keep your receipt in case there are any discrepancies on your credit report.
With a good credit score, you can easily buy a house and mortgage it. If you wish to have an even higher credit score, make sure that you pay your house mortgage off on time. Having a major asset like a house also looks good to potential creditors. Having a good credit score is a key factor if you ever need to take out a loan.
Do not file for bankruptcy. When you file for bankruptcy it shows for 10 years, your credit report will suffer from this. It sounds very appealing to clear out your debt but in the long run you’re just hurting yourself. Though it may provide some immediate relief, be aware of how it will impact your access to credit in future years.
Credit Score
If you have been frustrated and felt discouraged about your bad credit score, take these tips and use them to change that. Stop your credit score from spiraling downward, and look for ways to get back on track.
Try opening an installment account. There is a minimum amount each month that you will have to pay, so be sure not to get in over your head. Your FICO score will rise over time, if you responsibly manage this type of account.