Credit Repair: How To Make Your Credit Report Shine
Getting off track with your credit can have a negative impact on your life's path. Bad credit makes it difficult to take advantage of any financial opportunities that arise. But, you can fix your credit in a few simple steps and protect it for the future.
Getting a traditional home loan can be difficult, if not impossible, with imperfect credit. FHA loans are good options in these circumstances, because the federal government guarantees them. FHA loans are ideal for those who cannot afford the high down payment that most banks require.
If you have a card that carries a balance of over 50% of the limit, you should pay it down to below 50%. When balances are over 50%, your credit rating goes down significantly, so try to either spread out your debt or, ideally, pay off your credit cards.
For a credit score boost, an installment account will help. All installment accounts must stay above the set monthly minimum, so only open one if you can afford it. If you are able to keep up with one of the accounts, you should see your credit score improving quickly.
Try to negotiate with your creditors about the amount of interest you'll pay on an old debt. When a creditor hits you with incredibly high interest rates, you may have a case for negotiating to a lower amount. Your initial agreement likely included a commitment to pay interest. It is likely you can have exorbitant interest rates reduced if you sue the creditor.
Before you agree to any sort of repayment plan to settle your debts, consider how this will affect your credit score. Some methods are less damaging than others; research them all before making an agreement with your creditor. Some debt settlement companies are only after profits and do not communicate the likely consequences of their methods.
You should look over all negative reports thoroughly when attempting to fix your credit. Errors are not infrequent in credit reports. If you can prove the credit bureau is in the wrong, they should correct the reported error or remove it entirely.
If you notice credit reporting errors, always file a dispute. Create a dispute letter for agencies that have the error, and submit additional supporting documents along with it. Send your dispute package with a return receipt request so that you have proof that it was received by the agency.
Do not use credit cards to pay for things that you simply cannot afford. You will need to change the way you think. 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. Look at your budget, and decide what is realistic for you to spend from month to month.
Look through your credit card statement each month and make sure that it is correct. If there are late fees you don't deserve, act as soon as possible to get the matter resolved before it can affect your credit score.
Any time you establish any payment plan with any creditor, make sure you get it in writing. This provides you with documentation that an agreement is in place in case the company changes hands or the creditor tries to change the terms of the agreement. You also want it in writing if it gets paid off so you can go ahead and send it to credit reporting agencies.
These are ways of protecting your credit rating. Late payments are reported to all credit report companies and will greatly decrease your chances of being eligible for a loan.
You should keep a low balance on your credit cards to improve your credit rating. You can up your credit rating just by paying down your balances. The FICO system notates when a balance on a card is at 20,40,60,80, and 100 percent of the total available credit.
Our initial inclination is to defend ourselves, but in truth, lenders will not even glance at your defending statement. In fact, it could actually make matters worse by bringing to their notice the negative aspects of your report.
Avoid using those credit cards. Do all of your spending with cash or debit cards. If you have to make a purchase with your card, pay it off right away.
One of the most stressful things about poor credit is dealing with debt collection agencies. If a debt collection agency is harassing you, writing a cease and desist letter can stop the harassment. While such letters stop collection agencies from calling, the consumer is still obligated to pay the debts being disputed.
Start using credit again in order to repair damage caused by previous negative activity. Prepaid credit cards are one way in which you can repair your credit. These cards are used like a normal credit card and are reported to the credit bureaus; however, you can only use the amount of money you deposit into your account. This will make you appear responsible to future potential lenders.
Create a plan in order to pay back your debts. Even after you pay them off, they will still be present on your credit rating, but at least they will show up as paid and will not continue to harm your rating.
Debt consolidation programs can really help you rebuild your bad credit. Put all of your debts together to make it easier to budget for them. You will be able to pay in a timely manner, and improve your credit rating substantially.
Making monthly credit payments in a timely manner is one of the best ways to build your credit score. Even if you cannot pay the whole bill, try to pay as much as you can. Just one payment missed is something that can ding your credit report.
Put these ideas to use so you can repair your credit and stay on top of good credit practices. Time learning how to repair your credit, means a great future with many transactions since you will have a good score.