How to Fix & Improve My Credit

Paying off credit cards can improve your credit score.

Bad credit can be very problematic. A poor credit record can make it difficult to buy a house, purchase a car, apply for a student loan or even get a job. If you are stuck with bad credit there are several steps you can take to help fix this problem. Repairing bad credit can help make your life much easier.

Instructions

1. Find out your credit score. Sometimes you may have bad credit and not know it. Check your credit before you make any big financial decisions such as searching for a job or applying for a mortgage. You are legally entitled to an annual credit report by the three major credit reporting companies. The report is entirely free and should contain all details about your credit history as well as a current credit score.

2. Make sure there are no mistakes. Scrutinize your credit report carefully. Look for a listing of all purchases that you've made. If you see incorrect items listed, you have the right to have them removed from your credit report. An incorrect listing may exist because you share the exact name with someone else or because someone has a very similar name. You have the right to have any incorrect information removed from your credit report quickly. Contact the credit reporting companies and speak to them about any information that doesn't belong on your credit report.

3. Pay down any existing credit card balances--this is the best way to rebuild your credit. If your balance is small, save up as much as you can to help pay down the debt as soon as you can. If you have a larger balance consider working as hard as you can to pay it down. Take on more overtime if possible. Forego vacations and strip your food budget down to the bare bones. Make debt reduction your number one priority.

4. Negotiate with credit card companies. Many credit card company executives would rather reduce your interest charges than see you file for bankruptcy. Under bankruptcy filing rules, they may get far less money as a result of the filing. Let the credit card companies know of your dire financial straits. Consider hiring a lawyer for this purpose who can help represent your financial interests.

5. Take out a new credit card. One of the best ways to reduce your debt is to show that you can handle new debt. You can do this by applying for a new credit card. Use it to make small purchases that you know you can pay off. Pay off the entire balance each month.

References

• Credit Help
• Free Credit Report Information