At some time or another we find ourselves with the inability to pay our bills. If one thing in life is certain it is that the bill man, and the debt collector have no mercy. The unfortunate result is bad credit. However, bad credit can be repaired if you are willing to work at it. Read more for valuable tips to repair your credit.
An imperfect credit rating can make financing a home even more difficult than normal. In this situation, it is a good idea to try to obtain an FHA loan, because these loans are guaranteed by the federal government. FHA loans can even work when someone lacks the funds for down payment or closing costs.
Keep your credit card balances low. having a high credit limit on your card can seem like youÃ¢â‚¬â„¢ve won the lottery, but using that entire limit will lower your score. Try to keep balances at a 50% maximum. 30% is more of a prime target. By doing this you are showing that you can handle your credit well, and that you donÃ¢â‚¬â„¢t need every dollar that has been extended to you.
Pay attention to the dates of last activity on your report. Disreputable collection agencies will try to restart the last activity date from when they purchased your debt. This is not a legal practice, however if you donÃ¢â‚¬â„¢t notice it, they can get away with it. Report items like this to the credit reporting agency and have it corrected.
An important tip to consider when working to repair your credit, is to be sure that you hang onto all of the good standing status for any accounts that you can. This is important, because if it comes down to it, going further in debt on one account is much better than ruining the record of two accounts.
If you are trying to repair your credit score, check your credit report to make sure all of your positive credit is being reported. Credit report disputes arenÃ¢â‚¬â„¢t just for wrongly-noted negative marks. If you have a loan or account in good standing that isnÃ¢â‚¬â„¢t on your report, be sure to contact the holder of the loan to request that they report it.
If you are trying to repair or improve your credit score, do not co-sign on a loan for another person unless you have the ability to pay off that loan. Statistics show that borrowers who require a co-signer default more often than they pay off their loan. If you co-sign and then canÃ¢â‚¬â„¢t pay when the other signer defaults, it goes on your credit score as if you defaulted.
DonÃ¢â‚¬â„¢t purchase any luxury items until your debts are paid off. You want to focus on paying off any debts that you have so that companies will begin to trust you again. If you spend your money on new electronics instead of on your debts, you look bad and it makes it seem like youÃ¢â‚¬â„¢re irresponsible.
To repair your credit, start making your payments on time. Work on reducing credit card debt and try to keep the balances below thirty percent of the total in the future. Paying your cards on time prevents additional late payment fees and builds a positive history. The longer you can maintain a positive payment history, the higher your score will get.
The best way to get back at the debt collectors who were so adamant about going after you is to show them you can and will pay your bills. Not only can you stick it to them, but you will feel proud and happy for yourself when you get your credit straight. This article hopefully provided the tools to do as such.