Top 7 Tips For Repairing Bad Credit To Purchase Or Refinance A HomeYour credit report and credit score makes huge differences in your life, and in your finances. If you have a great credit score, your home, car, insurance, and more will cost you thousands less because you are deemed credit worthy. If you have poor credit, you can be denied a home loan, refinance, and even auto insurance. Yet, most people have absolutely no idea what is necessary to improve their own credit score to accomplish their goals. If you follow these tips, you are sure to see your score improve. Now that you re borrowing money on a consistent basis, you have to pay it back in a timely fashion. If you don t pay your bills on time, your score will go down and fast. Timely, in this case, means no more than 30 days late. That s the good news just because your credit card company charges you a late fee doesn t mean that they ve reported you late to the bureaus. Make it a habit of paying ALL your bills on the same day of the month that way you only have to go down the list once and you ll ensure that you avoid any late fees, and any 30 day lates. 5) Decrease Your Revolving Credit Balances If you already have credit card debt, you need to take a hard look at how it s distributed. Ideally, every card will be below 35% of its limit, but it will also help you quite a bit to keep them under 50%. You can accomplish this a number of ways. If you have money in the bank, pay the cards down there s not a savings account in the world that will pay out the interest your creditors charge you. If you don t have the money to pay the balances down, ask your creditors to increase your limit oftentimes, they will. Finally, if you have one card maxed out and another with a low balance, transfer some of the balance from the maxed out card onto the low balance card or open a new account and transfer part of the balance there. 6) Open a New Revolving Line of Credit Or Two If you don t have any revolving credit (credit cards) then it s time to open two accounts. If you have credit cards in collection, then you will probably have to get secured cards. A secured credit card will require that you deposit money with them in order for you to receive a credit card. This will feel like a debit card, but it s not. If you deposit $300 with your bank to receive a $300 line of credit, you actually have two separate accounts. When you charge a balance to your line of credit, you will have to pay it back - the funds will not be deducted from the initial $300 you deposited. After you ve opened your two lines of credit, use one for groceries and another for gas. Gas and groceries are two expenses that almost everyone has, and that almost no one will increase their spending on just because they are able to. 7) Buy a House If you don t already own a home, you are probably working on your credit in order to purchase your home. However, be very aware that your credit should skyrocket after you ve made 4-5 mortgage payments on your new home. This means that you shouldn t worry too much about your interest rate you should worry more about getting the approval on your home. Avoid a pre-payment penalty on your loan, and plan on refinancing your higher interest loan for a much better monthly payment about 1 year after your purchase. Credit scoring can seem very confusing and very intimidating. Unfortunately, there are a lot of uneducated professionals who claim to understand the scoring models but don t. Find someone who specializes in credit repair and who has a vested interest in the success of your repair program. Follow these tips, give it some time, and watch your scores increase! Article Directory: http://www.articledashboard.com
Eric Bramlett currently manages his Austin Real Estate Guide, his Austin Texas Real Estate company s website, & his Downtown Austin Guide. |