Fix Your Credit Score
With the current state of the country's economic status, it is no big surprise that there are so many people that are facing negative credit scores. Fortunately, these tips and tricks will provide useful insight into ways that you can work toward a healthier credit score.
If you have a poor credit history and can't qualify for a credit card, get a secured 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. If you open a credit card account, keep charges fairly low, and pay it on time, this will go towards improving your credit score.
By paying off outstanding balances you will make the fastest progress towards repairing your credit. Unless you are making a concerted effort to pay your debts, your credit situation will not become any more manageable.
Try to avoid using credit cards. Pay for everything with cold, hard cash. When you find credit card spending unavoidable, pay down your balance immediately.
Maintain multiple different types of credit. Your overall credit score is determined by a variety of different credit types. It's a good idea to have different kinds of credit, like car loans, credit cards and home mortgages--if they are paid on time.
If you want to avoid giving too much to your creditor, simply refuse to pay towards unfairly huge interest rates. You may be able to challenge an interest rate that is extremely high. You did however sign a contract that agrees you will pay off all interests as well as the debt. If you're going to try taking your creditors to court, make sure you can prove the interest rates they charged were excessively high.
Call your credit card companies and request that they lower your limit on your cards. It will keep you from overextending yourself financially, it sends a great signal to the credit card companies that you are a responsible borrower, and you will have an easier time getting credit in the future.
Debt collectors are an intimidating and stressful part of dealing with bad credit. You can use a cease and desist letter to stop any harassment from collection agencies. This doesn't let the customer off the hook for the debt, it merely stops the threatening calls.
Look for a trusted credit repair agency to help you. There are lots of disreputable credit repair agencies out there. Many people have fallen for scams involving credit repair. Always read reviews online first to find a good agency.
Shut off all but one credit card if you want to fix your credit. You will want to either transfer your balances onto the one remaining card or set up payment arrangements, but close the account to new charges. Doing so will allow you to pay off one individual debt rather than a multitude of lesser balances.
If you want a higher credit rating, you will need to bring down the balance on any existing accounts. Your credit score can go up if you just bring your balances down. When your available credit passes 20, 40, 60, 80 or 100 percent, it gets noticed by the FICO system.
The first step to maintaining or improving your credit score is to make sure that your bills are always paid on or before the due date. Setting up payment reminders will help you not to forget about making a payment. There are many ways to remind yourself of impending due dates for your bills. If you have an online banking portal, you may have a way to have emails and texts sent to you automatically on or before certain dates.
One easy credit repair tip is to maintain an active checking and savings account. Open accounts that are used regularly will demonstrate your financial income and ability to pay off bills on time. Keep those accounts in near perfect standing to show you are responsible. This means avoiding bounced checks and over-drafting your accounts.
Keep your credit card balances below 50 percent of your credit limit. Any balances that are over half your limit drag your credit rating down. So be sure to pay your credit card down or, if you can not, try to use another credit card.
Building your credit back up is the number one way to fix a bad credit score. A secured credit card, one that is prepaid, will help you improve your credit score. By doing this you will be proving to potential lenders you are credit worthy and capable of paying money when you are required.
If you can't make your monthly payments, contact each of your creditors to see if you can work out a payment plan you can afford. If you contact them and are faithful in making your new payments you can often avoid being reported to the credit bureaus for late payments. This may also alleviate some financial stress and allow you to work on paying off any debt accounts where you are not allowed to make a repayment plan.
If you are buying a home it will not always be easy, and even more difficult if your credit is bad. 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. FHA loans are great for the individuals that do not have the financial capability to make down payments.
Do not fall for the false claims many have about their ability to fix your credit. The claim that they can remove accurate debts from your credit report is false. Unfortunately, this negative information stays on your credit record for at least seven years. You can, however, succeed at having incorrect information erased from your credit reports.
Now that you are armed with the information you need to repair your credit, don't postpone implementing your plan. Use the info in this article instantly to begin the credit transformation.