Building Credit Ideas
There are several ways that we can build credit. If you are tired of collectors hounding you, or if you are frustrated that no one will loan you money because you never had credit, it is time to learn how to build your credit. First, and foremost never purchase items you do not need. If you 'want', do not let your wants wear you down and get you deeper in debt. If you are searching to build credit and have no history at all, make sure you have your priorities in order.
Bad Credit Building Credit
If you have, bad credit get a DO-IT-YOURSELF-Kit and gets the balls rolling. You can go to your public library and get books that will guide you through the steps of repairing your credit. Most libraries allow you to copy and print forms that you must fill out and then send to your credits.
There are systematic guides at your local library that has the tools for instructor debtors how to write letters to creditors. Letters are probably better than phoning creditors, since some creditors could care less about your situation and may threaten you. Another good reason for writing letters is that (copy in writing) is more valuable in a courtroom than a conversation on the phone. If something is said or an agreement is reached and the creditor later denies his or her claims then you can present this to any courtroom and they will listen to you first. Any documents that pertain to your credit history should be stored in a safe area. If you send letters to your creditors keep a copy of each letter sent and store it in a safe area. If you notice any errors on your bills or credit, reports make sure that you contact the appropriate professionals and dispute the charges immediately. If you have credit cards and used the card to purchase an item or use a service and this person sold you a defected item or else provided bad service, you DO NOT have to make payment toward the charges. You do however have to dispute the charges with the services or stores that sold you the product or service. If the sources refuse to give you an item usable, or else reimburse you for a service or product you have the right to deny payment.
Once you have disputed the charges with the sources you will then contact your card provider and let them know what occurred. If you are lucky enough to have a credit card with bad credit, use the card to repay your debts and then meet the monthly installments on the credit card each month. Ironically, you are getting out of debt while going in debt deeper. It is a solution when all else false. In other words, if you use the card to pay your debts each month and then payoff your credit cards the following month and then turnaround and uses the card to pay that month bills….
Now you see where I am going. Credit cards have interest rates so the bills each month on the card will increase.
No, Credit…No Problem
I do not need a credit line or credit card; I pay all my bills each month with money. Is this you? Well then, you have the obvious answer, but what if…
In today's world, we are moving into an era that requires us to have at least one major credit card. When you phone any business where you have debts, they will first ask you to pay with a credit card. If you go apply for a job, apartment, mortgage, car loan, or any other credit line you most likely will get a rejection notice in the mail. Most lenders will not give credit to anyone that has no credit history. The reason is that we are expected to establish a credit line when we are teens, and if we do not the lenders are often suspicious. The lenders do not have an idea and can only base their judgments of you on assumptions. Can I assume this person will make monthly payments on time? Has this person taken for granted a loan from a friend or family member in the past and there are no records available for me to see if it is true? There are many reasons that lenders will refuse you a loan if you do not have a credit history. The best solution is starting up a line of credit now, pay off your dues on time and avoid making purchases on items you do not really need. Staying out of debt means regulating your money each month and paying your bills on time.
Buying A Home After Bankruptcy - How To Improve Your Chances Of Getting Approved
After a recent bankruptcy, many people assume that purchasing a new home is impossible. No doubt a bankruptcy is extremely damaging to your credit history, and most lenders are not eager to loan you money or extend credit. However, there is good news for the millions of people who file bankruptcy each year. Contrary to popular opinion, homeownership after bankruptcy is very attainable.
Delay the Home Buying Process
Although it is possible to get approved for a home loan one day after a bankruptcy discharge, financial experts, and mortgage lenders do not recommend this maneuver. You can expect to pay ridiculously higher interest rates and fees immediately following a bankruptcy.
The key to getting back on track financially is establishing new credit accounts. However, it is wise to start with smaller accounts, as opposed to a home mortgage. These may include accounts that you can pay in full each month. For the most part, you should delay the home buying process for at least 24 months. During this time, open new credit accounts and establish a good relationship with your new creditors.
Improve Your Personal Credit Rating
By opening new credit accounts and establishing new credit relationships, you will boost your overall credit rating. Following a bankruptcy, most people have very low credit scores. A low credit score warrants denials for credit cards and loans. Moreover, a low credit score will forfeit the opportunity to attain prime rates.
During the two years following your bankruptcy, strive to increase your credit score. This will take time. The best way to increase your personal credit rating is to avoid paying your bills late. Furthermore, avoid too much debt. Maintain small credit balances, and try to payoff your credit card balances each month.
Make a habit of regularly monitoring your credit report. It is recommended that consumers attain a copy of their credit reports about every six months. As you open new credit accounts, and maintain a good payment history, this will be noted on your credit report. If errors are present on your report, contact your creditors and the bureau to resolve the inaccuracies.
Using Sub Prime or High Risk Mortgage Lenders
A bankruptcy will remain on your credit report for approximately ten years. During this time, most lenders will not offer you prime or low interest rates. To avoid paying higher fees, you must finance your home with a sub prime lender. Sub prime lenders specialize in high risk loans and mortgages. Their goal is to get you the best financing package for your circumstances.