Credit Repair Tips For Novices And Experts
Posted at by CreditWiz on category CreditWhether 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 probably did some damage to your credit. Fortunately, there are quite a few ways that you can remedy your credit situation.
Financing a new home can be a challenge, especially if you have a history of bad credit. If this is the case, you can apply for a loan through the Federal Housing Administration (FHA). The credit requirements for these loans are more lenient than those of conventional lenders, and the federal government also guarantees the loans. FHA loans can even work when someone lacks the funds for down payment or closing costs.
If you want to repair your credit but do not qualify for a regular credit card, consider a secured credit card. In order to get the card, you will have to fund the account as sort of an insurance that shows the bank your debts are going to be paid. A responsibly used new credit card will begin healing your credit score.
If you have credit cards where the balance is more than half of your credit limit, pay these down right away. Credit card balances are among the factors taken into account when determining your credit score. Maintaining balances over 50% will lower your rating. You can attain lower your balances by using balance transfers to move debt from accounts with higher balances to those with lower balances, or by simply paying off some of your higher balances.
If you are looking to repair your credit, then you should not believe a company if they promise they can remove negative information from the report. Specifically if this information is correct. Unfortunately, this negative information stays on your credit record for at least seven years. If the information is an error, the credit report can be corrected.
One of the first steps of improving your credit score is ensuring that your bills are always paid. Even more important than just paying your bills, is to pay off the entire balance, and pay them on time. Your credit score starts to improve immediately upon paying off some of your past due bills.
Before consulting a counselor for credit repair, do your research. While some counselors are legitimate, offering genuinely helpful services, others have ulterior motives. Others are just plain fraudulent. Smart consumers will always check to see that credit counseling agencies are, in fact, legitimate before working with them.
Find and challenge errors on your credit report using the dispute process offered by each credit reporting agency. Create a dispute letter for agencies that have the error, and submit additional supporting documents along with it. 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.
If you are living beyond your financial ability, stop now. You will need to change the way you think about spending money. A lot of people rely on credit to maintain an unrealistic lifestyle, but when the credit runs out, all that’s left is a very big bill. Be honest with yourself about what you can truly afford.
To rebuild bad credit, it can be a good idea to get rid of your extra credit cards. You should only have one. Make the minimum payment each month on your other accounts, but make the largest payment possible to the one account you are focusing on. Doing this will allow you to focus on paying off one large credit card bill, instead of several smaller ones.
Repairing a poor credit score can seem like a daunting task, but improving your score is possible with guidance and knowledge. Apply the tips you learned here and get started on your way to good credit.