If you have bad credit, it can prevent you from many things, such as car loans or home loans. Credit scores can drop due to neglecting bills or paying fees too late. If you are looking for ways to improve your credit score, the advice in this article can help you.
If you need to repair your credit, the first step is to come up with a workable plan and stick to it. Making changes to become a wise spender means you have to make a budget and rules, then follow them. If you don’t need something, don’t buy it. Put each potential purchase to the test: is it within your means and is it something that you really need?
Try to keep a balance of less than 50% of your available credit on all of your cards. If any of your balances climb past half of your available credit limit, pay them down or spread the debt around other accounts, otherwise, your credit rating gets tarnished.
If you have a poor credit rating, it can be extremely difficult to obtain a mortgage loan for a home. See about getting an FHA loan, which are loans that the federal government guarantees. FHA loans are also great when a borrower doesn’t have the money to make a down payment or pay closing costs.
Good credit scores allow you to take out loans, buy a house, and make other large purchases. Timely mortgage payments augment your credit score. Home ownership also means you have assets that you can rely on to increase your credit score. This will be very helpful if the time comes where you need to take out a loan.
You can dispute inflated interest rates if you are being charged more than you should be. It is important to know the terms of your original agreement for the debt you incurred. Usually if you agreed to the terms the terms will be upheld as legal. If you believe the charges are excessive and your debtor will not negotiate down the interest and other additional charges, state laws might provide you with additional avenues to pursue a reduction in these charges. Federal law provides that when you are billed by a collection company the fees and interest cannot exceed the amount of the original debt. However, you agreed to pay the interests off when you signed the contract. You may wish to make a legal claim that the interest rate charged exceeded your state’s statutory limits.
If you have credit cards with a utilization level over 50%, then pay them down until they are below 50% utilization. Any time you exceed 50% of your credit limit, your credit rating is affected. Pay off credit cards as fast as you can, or spread the debt out further.
If you want to send your children to college, or need a simple loan, your credit score matters. Even those that are in the hole the farthest can benefit from this advice.