Are you worried about your credit rating? Have you made a few mistakes in the past that still seem to be haunting you? This is not an uncommon story and we have put together some information that can help you to get your credit rating back into good shape.
A home loan is normally the largest debt that many people will have in their lifetime. Many institutions have an extensive approval process that can look negatively on a prior record of bad credit even if it is no longer relevant. A larger deposit and extensive documentation of recent good credit payments can help to gain approval. You may want to consider FHA loans that normally have less reliance on historical credit information. They are government backed and can help with other expenses such as closing costs.
Plan and negotiate
It is important to have a financial plan so that you can set some goals and map out a way to get to them. When you have your financial plan, you then make a budget for your spending. This needs to be realistic so that you will be able to adhere to the budget and keep your spending in check.
If you have problems with your repayments then you may be able to use your budget to help you to negotiate with your creditors. You may be able negotiate a reduction on the interest you are paying or the withdrawal of fees and charges that are inflating the outstanding balance. Many creditors when faced with your budget information and a payment plan that lets them recover the principal will accept it or try to find a mutually agreeable position.
High interest rate debts should be your highest priority in paying off. It is important even if you need to limit some of your other activities or planned purchase to pay these off as soon as possible. You should also check with your state consumer credit office because they may have limits on interest rates that can be charged and may be able to help you to have them reduced or struck out.
Understand any agreements
When you are negotiating with your creditors, you might be asked to make a formal agreement. It is important before agreeing that you understand what this means in regard to your debt but what it can also mean to your credit score. They will be looking at what is best for them and will not consider if this will negatively impact your future ability to get credit.
It is amazing how many people do not check their credit card statements and their credit history. While mistakes are rare they do happen and they can cost you more than just the money you stand to lose.
Check your credit card statement and try to reconcile every purchase. Query anything you do not understand or cannot identify. There are cases where people have been charged monthly for years before realizing that they were paying for something that were not receiving.
You should regularly check your credit history to make sure that it’s accurate. Any negative reports should be thoroughly checked because they can be removed if any detail is incorrect.