There are many reasons why you may have a poor credit history. Credit cards could have been your primary means of support while you were gaining an education, a passion for shopping may have gotten the best of you or the decline in the economy might have left you jobless for a time. Fortunately, you can take some actions to get your credit score climbing in the right direction.
If your credit is not perfect, getting a mortgage can be tricky. If possible, apply for an FHA loan; these loans are backed by the United States government. FHA loans are ideal for those who cannot afford the high down payment that most banks require.
Planning is the first step to repairing your credit. Real changes come from commitment to healthy spending habits. Stick to the essentials, and avoid frivolous purchases at all costs. Before purchasing an item, ask yourself if it is absolutely necessary and well within your financial means. If you cannot answer each of these in the affirmative, do not buy the item.
For those with imperfect credit, it can be hard to secure financing for a home. 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. Even if an individual does not have money for the down payment to purchase real estate or pay closing costs, FHA loans may still work.
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. At that point, it is ideal to pay off your cards altogether, but if not, try to spread out the debt.
Once you have your credit score higher, you will be able to finance a house. You will get a better credit score by paying your mortgage payment on time. When you are a home owner you will be financially stable based on what you own. This will be very helpful if the time comes where you need to take out a loan.
If your credit is such that you cannot get a new card to help repair it, apply for a secured one. These are extremely easy to qualify for. A secured credit card looks just like a regular card, and works like a regular card, but you have to have the necessary money in an account to guarantee payment. By using a new card responsibly, your credit rating will start to increase.
To start fixing your credit, you will have to pay your bills. Paying your bills on time and for the full amount is important. Once you start paying your past bills off, you will notice an immediate improvement in your credit.
An important tip to consider when working to repair your credit is to work closely with your credit card companies. If you do this you’ll find that your debt doesn’t increase and your credit is improved. Politely ask if it is possible to have your minimum monthly payment adjusted or due date changed.
Make sure you thoroughly research into any credit score repair agency or counselor before you do business with them. Some counselors truly want to help you, while others are untrustworthy and have other motives. Others are outright scams. To help protect yourself from fraud, investigate any credit counselors. One way to check an agency out is to check with the Better Business Bureau.
You can get better interest rates on credit cards and loans when you have a good credit score. This will help you afford your payments, and get out of debt quickly. Asking for a better deal from your debtors can help you get out of debt and back to achieving a better credit score.
Call and request lower limits on your cards from the credit card companies. Not only will this prevent you from owing more, but it will be reflected in your credit score because it shows that you are responsible with your credit.
Although it can seem daunting, you can get your credit on the mend by learning about it and taking the proper steps. Take the advice that has been provided in this article to start making positive steps toward better credit.