With unemployment so high and costs of living continuing to rise, it is unsurprising that the average credit score is lower than it has been in some time. The following tips are presented to help you improve your credit score and help you be more disciplined with your money.
Getting home finance can be quite tough when your credit rating is not good. 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.
If you have credit cards with a balance that exceeds 50% of your credit limit, you must continue to pay on them until the balance is lower than 50% of the 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.
Your interest rate will be lower if you have a good credit score. By doing this your monthly payments will be easier to afford and your bill will be paid off faster. Obtaining the best possible interest rate saves you money, and helps you maintain your credit score.
Good credit scores mean you can easily qualify for a home or car loan. By paying off your mortgage on time, you will even improve your credit score further. Owning a home provides financial stability which is backed by your asset, the home, and as such, results in great credit. This will be useful in case you need to borrow money.
Before you hire a credit counselor, make sure that you have done your research. While many counselors are reputable and exist to offer real help, some do have ulterior motives. Some are just people trying to scam you. You should research any counseling service you are considering prior to initiating communications with them.
You should examine any negative entries on your credit report thoroughly if you want to fix your credit problems. If you find errors in any of the information, you might be able to request the entire negative record be removed from your credit report.
If your credit isn’t so hot, but you need new credit to demonstrate responsibility, then look up your local credit union. 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.
Dispute any errors that you find on any of your credit reports. Write a dispute letter to any agencies with recorded errors, and include supporting documents. Sending your letter by certified mail provides you with proof that the letter was received.
Try not to file for bankruptcy. It can adversely affect your credit for up to 10 years. It might seem like a good thing but you will be affected down the line. By filing for bankruptcy, you might have a lot of trouble getting a credit card or qualifying for a loan in the future.
Now you know how to repair your credit score, so get started on a plan of action. Don’t let your credit score ruin your life; instead use this information to begin repairing the damage.