Sunday, 21 June 2020

How To Fix Bad Credit - (4 Steps To Follow)

If you have a bad credit score or a low credit score I don't want you to get discouraged there are things that you can do and I will go over 4 things in this article that you can put into practice right now.  Look, before we even get into the main content of this article, lets me say something if you have a low credit score or a bad credit score it is not necessarily your fault, everything happens in life and so many different things happen, you could have had a bankruptcy that maybe was due to the loss of a job, loss of a loved one, could had a foreclosure on a house a short sell in times past, things happen what is important is what we have learned from those experiences and how we choose to move forward. So if your circumstances having low or bad credit just take heart and know that we going to get this fixed together.

One of the things that I want you to understand is that the most common reason that people do not move forward and take a step forward is doing the fear, fear is an acronym, fear means false evidence appearing real, do not let false evidence hold you back from taking the steps that you need to repair your credit and progress in life whether it is pertaining to your credit score or anything else in your life do not let fear stand away.

Let's go ahead and move in into our content

1. Apply For A Home Loan

Go ahead and apply for a mortgage. And why am I saying that? well, very simple, because we don't know what we don't know until we know that we don't know it. If you have ever heard that expression before it is quite true, we don't know what your current length of employment or your current income is going to pass muster, because sometimes you can get a home mortgage for a lower credit score than you could have thought, because a lot of lenders can improve you with a low of 580 credit score and above for a home mortgage so it is important to know what a bad credit score looks like. A bad credit scores like if you are in the 400s or maybe in the low 500s, that's would be technically considered a bad or low credit score, but a 580 or above in a lot of cases depending on the lender you can get approved for a mortgage, and once you do get approved for a mortgage and purchase your new home it is going to boost your credit score big by the virtue of being a homeowner.

There are things that you can get to know by just taking the first step forward and go on ahead and completing an online loan application with your local loan officer just to get the ball rolling and see where you are at. At a minimum, they will be able to give you a game plan and say, hey, you know what? here's the thing, it looks like you might not be ready just yet, but in about three or nine months you might be able to go ahead and purchase your new home if you take the following steps. 

It is about coming up with a game plan, coming up with a strategy that goes ahead, and fixes your credit and gets it right. Because a lot of people also think that sometimes you need 20% down on a home loan, that's just not the case, there is a lot of low downpayment loan programs out there, homeless possible programs, first time home buying programs, you should look into.

2. Deep Dive Into Your Credit 

If you don't have a Credikarma account right now go ahead and get a credit karma account so you can start taking a look at what they are reporting on your credit. There is a lot of things that sometimes can be done that are actionable items, an actionable item is maybe your credit card utilization rate is too high, meaning if you have a thousand dollar balance maybe you are carrying $500 a month on your balance which is like a 50% utilization. By just dropping that down to under 25% or under 20% and maintaining that 15 to 20 percent marker, it is going is continue to give you consistent payments on that credit card which is going to help you drive up your credit score, at the same time it is going to keep it underneath a certain level for your credit card utilization, that's going to be more favorable to boosting your credit score and getting approved for your home loan.

If you have collections, if you have defaults, if you have missed payments, you can pay off those collections, you can restructure that, you can ask them to work with you for a repayment program on those, and ask them to remove preferably, remove the negative inquiry or the negative hit on your credit report. If you have missed payments obviously, it can take anywhere between 17 years depending on the type of negative hit on your credit for it to drop. Now, if you are wondering about hard inquiries, look, hard inquiries drop in two years or less, just want to let you know that up front.

3. Prepare To Repair Your Credit 

If you are serious about boosting your credit score then it is time to get the work, it is time to put your nose a grindstone and start being responsible for your actions and responsible for your decisions and making sure that you are taking the appropriate steps forward to do what is going to be best for you in the long run. Focus on what you can do, focus on paying down your debt, focus on boosting your credit score, and focus on what you can do to make payments easier and lower. One of the steps is just getting organized, if you don't have a budget yet, create a budget, and by creating a budget it will give you more control over your financial situation. If you create a budget then you are going to create a savings plan it is going to put your finances on a situation into perspective and go a long way to helping you get your credit score. So get organized, get a budget and stick to it, and discipline yourself so that you can start building up for yourself in life. 

It is a shame because a lot of Americans don't have than $1,000 in a savings account. Well, a thousand dollars in the United States as you and I both know is not going to buy you any time, money is there to more or less buy freedom, buy time if you do not have enough money that lives through the six months or 12 months saved up, then that's another good reason why you want to have your budget outlined so you can begin saving for that, God forbid, something ever happened, then you have a reserve fund that's ready to go.

4. Make Minimum Payments & More 

When you commit to a minimum payment this goes back to the consistent principle of paying your credit cards, student loan debts, whatever the case may be, on time, every time, and by paying a little bit more, even if it is just $5, it is going to pay off the principal balance quicker, it is going to charge you less interest over the course of that specific debt or that specific credit that you were issued, and it is going to help you pay it off a little bit faster. Every little bit really really helps, so make sure that you stay focused on that, always consistent on paying just a little bit more. It is a good rule of thumb and it is a great habit to get into even when you do get your mortgage, just a few extra payments, just a few extra dollars can add up and make the world of a difference for.

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