Poor credit is a terrible thing for you to deal with as you journey through life. It can cause you to miss some great opportunities and take away some financial options. You can start repairing your credit and put in a safeguard for your future credit rating by taking steps to do so.
Financing a home can be difficult if you have bad credit. There is, however, alternative types of funding available that are offered by the banks. FHA and USDA are two such agencies who offer finance to those with lower credit scores, sometimes with low down payment and closing cost clauses. Even when the resources for making down payments or paying closing costs are lacking, FHA loans can help.
The first step in repairing your credit is figuring out a plan that works for you, and sticking with it. You must make a commitment to making changes on how you spend money. Be sure to buy only the things that you need. If you are buying something because you want it, and don’t need it, put it back on the shelf.
Start by paying off credit cards with accounts 50% over your limit. You can concentrate on another card once these accounts are lowered to under half of your limit. Once your balance reaches 50%, your rating starts to really dip. At that point, it is ideal to pay off your cards altogether, but if not, try to spread out the debt.
Try to negotiate with your creditors about the amount of interest you’ll pay on an old debt. It is bordering on illegal for credit card companies to charge you skyrocketed interest rates. Remember you agreed to pay any interest that accrued over the life of the account. If you go ahead and sue your creditors, ask that they consider the high rate of interest.
Before consulting a credit counseling agency, be sure to check out their background and history. While some counselors are legitimate, offering genuinely helpful services, others have ulterior motives. Some will try to cheat you. Be a wise consumer by checking whether or not the credit counselor you are going to deal with is legitimate.
Before you commit to a settlement, you should first determine exactly how the agreement will affect your credit. Some debt settlements are better than others. Do your homework and find out how your score will be impacted before agreeing to anything. Creditors are only trying to get the money that you owe them and could care less how that hurts your credit score.
Do not use credit cards to pay for things that you simply cannot afford. You will need to change the way you think about spending money. In recent years, easy credit has made it very fashionable for people to purchase the things that they cannot afford, and everyone is now beginning to pay the hefty price tag. Be honest with yourself about what you can truly afford.
In order to start repairing your credit, you should close all but one of your credit card accounts. It is important to make small payments or transfer a balance to the open account. In this manner, you can take care of all your credit card debt by paying down a single balance.
Carefully check all charges on your monthly credit card statement for errors. Immediately report any errors to your credit card company to prevent a bad mark on your credit report.
Use these and other tips to improve and maintain a credit score. Having a good credit score is crucial to getting the best interest rates possible and is definitely worth the effort.