What You Should Know About Credit Score Improvement

| April 18, 2014 | 0 Comments

It can be stressful to have to deal with a negative credit score. Perhaps you have been denied access to loans or to housing because of your score. It is time to deal with your debt and get back on the road to good credit. Here are some great ideas to get you back on track.

For some it may hard to finance their home due to having less than ideal credit. Try to secure an FHA loan; these are federal government guaranteed. FHA loans are also great when a borrower doesn’t have the money to make a down payment or pay closing costs.

TIP! Creating a payment plan and sticking with it is just the first step to getting your credit on the road to repair. Real changes come from commitment to healthy spending habits.

Try to keep a balance of less than 50% of your available credit on all of your cards. 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.

You can get better interest rates on credit cards and loans when you have a good credit score. This allows you to eliminate debt by making monthly payments more manageable. Compare offers and choose the best interest rate you can find when borrowing money or subscribing to a credit card.

Interest Rates

TIP! Any credit cards that have balances over 50% of your limit should be paid off until they are less than 50% of your limit. Once your balance reaches 50%, your rating starts to really dip.

Paying off any debts you have that have high interest rates can help you to avoid paying too much. You may be able to challenge an interest rate that is extremely high. However, you signed a contract agreeing to pay off interests. Should you sue any creditors, it is important to push the fact that the interest rates are outrageously high.

Make sure you research a credit counselor before you visit them. Although some can be quite legitimate, others have motives that are less than kind. Other options are clearly scams. You should research any counseling service you are considering prior to initiating communications with them.

Credit unions are an option for those who have run out of options. Credit unions focus more on the local situation instead of the national one, and may provide more options or rates that are more favorable than those of a larger bank.

TIP! To improve your credit rating, set up an installment account. An installment account requires a monthly payment, make sure you can afford it.

If you find any errors on your credit reports, dispute them. Include proof along with a letter disputing the claim to the agency that recorded the errors. Sending your letter by certified mail provides you with proof that the letter was received.

You cannot live a life that is beyond your means. This takes time and a change in attitude to accomplish. In past years, people used good credit ratings to buy the items that they normally couldn’t afford, and they are now currently paying big payments. Examine your finances and make wise decisions about how much you should be spending.

This advice can help you to turn your credit score around. Because you are rewriting your credit report, you need to be consistent in making all of your payments. Clawing back from a credit disaster is doable, so stop making excuses and start today!

Tags: , ,

Category: Finance

Leave a Reply

Your email address will not be published. Required fields are marked *