If you are seeking to fix your credit rating, it is useful to have diversified kinds of credit accounts. Your credit score takes into account all types of credit that you have. If you pay your mortgage, car loan and credit card bills on time, it will help your credit score dramatically.
You might feel pressured to send in large payments you can’t afford, or to agree to payment plans. Be aware of what you can afford before you talk to them, and stick to your guns. You will only further damage your credit rating by making promises you can’t keep. The relief from the collection calls will be short-lived at best. Having poor credit makes financing a home a nightmare. There is, however, alternative types of funding available that are offered by the banks. FHA and USDA are two such agencies who offer finance to those with lower credit scores, sometimes with low down payment and closing cost clauses. FHA loans are also great when a borrower doesn’t have the money to make a down payment or pay closing costs.
You can easily get a mortgage if you have a high credit score. You can improve your credit by paying your mortgage on time. Home ownership demonstrates that you have financial stability because they are secured by a valuable asset, and this results in a raised credit score. These benefits will pay off if you need to secure a loan.