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Fix Bad Credit
Your credit doesn't have to be perfect to buy a home.
Lenders rate loan applicants by their credit risk. Borrowers are rated from A to E, with A-rated borrowers being the best credit risks. The better your rating, the better the loan terms a lender will offer you.
Free Financial Counseling
Small financial slip-ups, such as being late on a mortgage payment in the past year, can move you from the A to B list. If your credit rating is less than B, you may want to contact the
NFCC (National Foundation for Consumer Credit) for suggestions and tips. They offer free counseling and can help you plan your financial future.
If you do have bad credit, here are some tips you may want to keep in mind to get your finances under control:
Cut Back on Spending
- Create a budget- write down how much money you make and what you spend it on. Try to set limits for yourself and cut back in areas that too much money is spent. You can use this
budget form to help
- Limit your credit use until your finances are under control.
- Don’t make any spontaneous or large purchases (new car, TV, etc)
Repair Your Credit Report
- Call your creditors and discuss payment schedules that you can afford. Creditors will want to work with you to find a payment solution.
- Close any accounts you do not use.
- Write your creditors explaining any late payments. They may remove the offending statement if you provide a reasonable excuse.
Pay What You Owe
- Pay at least your "Total Minimum Due" by the "mail by" date on your monthly statement to keep your account in good standing.
- Don't skip any payments and try to pay more than the minimum or even the whole balance each month.
- New spending and carry-over balances combine to increase the amount of your average daily balance — and the finance charges you will owe. You can decrease this expense by paying down your balance as much as possible each month.
Make Timely Payments
- Pay attention to the "mail by" dates for bills so that they arrive on time. We recommend that you mail your payment a week before the due date. You can be charged additional fees if it's late.
- If you are moving, fill out the change of address form to ensure that your statement goes to your new address. You are responsible for your balance even if your statement goes to the previous address.
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