The most annoying thing you may experience in life is having bad credit, because it leads to hardships. It can rob you of your financial options and prevent you from taking advantage of great opportunities. However, a few simple steps can be taken back in the direction of a good score.
Financing a home is not always an easy task, especially when you have less than perfect 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 are ideal for those who cannot afford the high down payment that most banks require.
Look at the credit card accounts you have with a balance over 50% of the credit limit. Pay those off until they fall under this number. 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.
Having a good record allow you to qualify for things like a home mortgage. Fulfilling your mortgage obligation in a timely fashion does a great deal of good for your credit rating. Once you own a home, you will have financial stability secured by your assets, thus a good credit score. Having a good credit score is a key factor if you ever need to take out a loan.
Begin paying your bills to repair your credit. You should always make an effort to pay your bills on time and in full. Your credit rating will quickly rise as you settle up your overdue bills.
Try to pay down all of your debts until you’re only carrying a balance on one. Make necessary arrangements to set up payments, or transfer the balance to your remaining account. It is much easier to manage one large monthly payment than it is to keep track of multiple smaller ones.
If you are able to negotiate a repayment plan with your creditor, be sure to get it in writing. Having the plan in writing will protect you if the creditor reneges on the plan or if your debt is transferred to another creditor. Finally, when it is paid in full, get documentation thereof to submit to credit agencies.
Take the time to carefully go over your monthly credit card statement. Look for any changes that have happened, and make sure they are correct. You do not want to end up paying for a purchase that you did not make. You need to be sure that everything is correct on the statements.
Lower the debt on revolving credit accounts, like store and credit cards, first. Just lowering your balances can raise your credit score. Your FICO credit score notes what your balances are on your revolving accounts based on the credit you have available.
It is difficult to just forget about negative reports, but writing a statement is useless. It can even draw more attention to the bad spots, so don’t do it.
Build your credit back up if your current credit scores are low. Prepaid credit cards offer you the ability to build credit while not having to worry about late payments or penalties. This approach will indicate to others that you are serious about taking responsibility for your financial future.
Begin paying off your debts now. The amount you owe compared to your income has a huge impact on your credit score. You will be seen as a greater credit risk if your debt is too high in comparison with your income. Since it will likely take a while to get rid of your debts, write a plan for decreasing your debt gradually, and follow it.
Following these simple tips can help you get on the road to repairing your credit and keeping it healthy. Since having a solid credit rating is vital for various transactions, time spent learning how to repair your credit is not wasted.