Why it’s important to know what to do to maintain a good standing
- We are a credit-driven society with everything revolving around its importance.
- From buying a home or car, renting an apartment and sometimes and even opening a bank account.
You first need to know what you’re starting with
- Everyone is entitled to a free credit report every year. If you are denied credit somewhere you are automatically entitled to another one. Look it over VERY CAREFULLY. The information is a compilation from the three major credit bureaus so it is easy for there to be mistakes. If you find errors start working on correcting them right away. Once you rectify an error make sure that you receive documentation to support the correct information.
- For those who do not have a credit history, or very little, there are ways of generating credit accounts. An account is something that you have a history of paying on time. Cell phones are one way. Utilities can be used as creditors, too. What you are looking for are accounts that you are paying on time that can be used as a reference to build your case. Talk to your lender to see if they have other suggestions.
- Establish a new credit account. If you don’t have a credit card, or can’t qualify for one get a secured one. Banks offer these cards that are connected to a savings account. The account guarantees the card limit will be covered in the event that you default. Charge a small amount, pay it off as soon as the bill comes and repeat next month. Before long, you’ll have a card with a history. Just make sure that the account will be reported to all three credit bureaus.
- Community banks and credit unions are great for getting a small loan. Borrow a small amount that you can easily make payments on. Then, pay it off early. If you want, do it again. It only helps create stability. Again, make sure it is reported.
- If you have any collections contact the company and ask to settle the account. Again, make sure you get the agreement in writing and that the negative mark will be taken off. Once you have everything in writing, follow through.
How to estimate your money down
- For every $1000 you put down on a home it lowers your monthly payment approximately $6 a month
- So if you can borrow some from your family or if you have some money in savings, some of it might do better paying off old debt to give your credit time to recover. Talk to your lender to get a plan of action on open accounts. They can tell you which ones you should address first that will pay back the most in the end.
