Posts Tagged ‘Repairing poor credit’
Is your credit score below 600? If it is, you have bad credit. Lenders might deny you loans because you are considered “high risk”. If they do qualify you for any of the loans for people with bad credit, they will most likely charge a high interest rate. So how does one begin the journey to fixing poor credit?
When was the last time you checked your credit score? It’s good to check every six months – the report (without your score is free once a year and you have the option of arguing whatever point is on the report that might be hurting your score. However, you should know that if you check your credit score “too much”, you could lower your credit score.
Bad credit can be blamed on several things. First and foremost, you should look at your own spending habits. Do you but a lot on credit? Do you have high limits AND high totals? Have you made a late payment? Most people don’t realize that late payments can influence their credit score.
Is it possible to fix a bad credit score? Yes. However, it will take time. The first step is getting rid of your debt. You don’t have to totally eliminate it. Just lower it a bit so your debt to income ratio isn’t so high. Pay your bills on time and pay a bit more than the minimum payment to your credit card companies. With a little work you move out of bad credit and into what’s considered good credit.
A little known secret: if you know someone with good credit, become an authorized user on one of their credit cards. Then, they’re credit history becomes your credit history. This can be tricky, though, because as an authorized user, you can technically purchase using their card. A person with good credit may not want to share their credit card with a person with bad credit.
With a good credit score (above 600), you can negotiate with some lenders to get a better interest rate. Be courageous and be informed. You never know what will happen until you begin to ask questions.
When an emergency happens – such as a needing to care for a sick or dying loved one, natural disaster hits your town, your much-needed car breakdown, or a tree falls through the roof of your house – is when you need your credit card or other means of going into debt quick. If there’s no wiggle room for the inevitable crisis, you’re in trouble. Better to prepare for the crisis BEFORE it happens.
Good credit is like the ancient city of Rome; neither was built in a day. It takes time and patients to fix your credit. With a good credit you may be able to buy the house or car of your dreams. You will be surprised who will want to lend you money when you have good credit.