Having a bad credit rating can seriously delay your goals in life. It can rob you of your financial options and prevent you from taking advantage of great opportunities. There are a few steps you can take to start repairing your credit now.
For those with imperfect credit, it can be hard to secure financing for a home. FHA loans are good options in these circumstances, because the federal government guarantees them. You may even qualify for an FHA loan if you don’t have enough money for a down payment or the closing costs.
Look at the credit card accounts you have with a balance over 50% of the credit limit. Pay those off until they fall under this number. You should keep your balances under fifty percent; anything over this and you can lower your credit rating, so spread out the money you own and pay down your credit cards.
Try to keep a balance of less than 50% of your available credit on all of your cards. If your credit card balances exceed 50% of their limits, it will lower your credit score, so spread your debt over multiple cards, or better, pay down the balances.
Good credit scores allow you to take out loans, buy a house, and make other large purchases. When your mortgage is paid in full, you will be rewarded with increased scores on your credit file. Owning a valuable asset like a house will improve your financial stability and make you appear more creditworthy. This is helpful in case you want to borrow money.
Don’t get involved in anything that could get you arrested. Creating a new credit score or using a different identity seem like easy solutions but bad credit is not worth taking this kind of risks. Creating a new credit file is very illegal and you can be easily caught. The end result of getting caught during the crime could be expensive legal fees and a possibility of time behind bars.
Having read these simple tips, the only thing left now is to apply them. It is always worth your time learning how to fix and maintain good credit, since it has a major impact on most of the larger financial deals you will make.
