With the state of the economy, many people are lead to believe that there is no way they can get cheap loans, especially if they have a bad credit score. If you have a terrible FICO score then you are generally not going to be able to find a bank or lender that is going to cut you a break on the interest rate. This means the more your monthly payments are going to be and the higher the amount you are ultimately paying for something.
The good news is even with an economy in a little trouble, you can still secure loans with low interest rates if you have a good FICO credit score to back you up. If you already have bad credit -- simply because of young age, lack of knowledge, or a circumstance completely out of your control -- there is a way to fix it all. And one of the easiest ways to do this is to clean up your credit report.
There are ways that you can use to clean up your credit report. You may not be able to make it completely perfect right away but you can surely improve it enough that you will be able to get a car loan or a mortgage with the lowest possible rate. Here are the steps:
1. The first thing you will want to do is pull your credit report. Everyone is entitled to a free report from each one of the credit reporting agencies each and every year. Look for any and all discrepancies that could be affecting your current score. Fraud, unfair reporting, and simple mistakes happen all of the time and they can be fixed. Having such problems fixed could greatly increase your overall credit score.
2. You will want to look at the debt you do rightfully have. Sometimes having too many open credit cards will affect your credit score even if they are not all maxed out. If you have more then two credit cards open you need to figure out which ones would be the most valuable to you in the event of an emergency and work on closing out the others. Once you have closed the unwanted accounts your credit report will start to shape up.
3. Have you exceeded your limit on some credit cards? If so it may be worth looking into tapping into your savings or taking up a second or part time job in order to get yourself out of debt.
4. Make sure that your bills are your priority. You have to make sure that all of your bills are paid and paid on time. By making sure that you are giving your creditors something positive to report to credit reporting agencies you are on the right track to bringing your credit report back to good standing and secure cheap loan deals.
