How to Fix Bad Credit

Video Transcript

"One question that often comes up is how to fix bad credit? Well, obviously, the best way is not to have bad credit, but that's not what the question's asking. Once you find that you do have bad credit, the number one thing that you need to look at is, why do you have bad credit? Is it because a situation occurred, such as a layoff, or perhaps a medical issue? Something that was of a crisis, epic situation that forced you into being able to not pay your bills? If that's the situation, then that's usually something that you can explain to your future creditors. Now that does not remove any of the bad payment history, or judgments from the past on your credit bureau report. First, you'll want to get a copy of your credit bureau report. You'll want to get one from all three credit bureau reporting agencies. You can do this by simply going to www.annualcreditreport.com, and every year, by virtue of law, you are given a free credit bureau report by each of the credit bureau agencies. So you want to get your hands on your credit bureau report first, and then you'll want to look and see what's on there. And you want to address every single piece of bad credit history. In other words, you'll want to look at, perhaps a judgment that you had against you for not paying a debt. And then you'll want to see, hum...did you already pay that off? If so, then you'll want to make sure that that credit bureau has that information reported on that report. It's up to you to add any information about any of those debts that you have had bad history on, any debts that you have not paid, but have currently paid off. Or any debts that, perhaps you had bad history, but you now have a payment plan that is acceptable to the creditor. You'll want to have an explanation for each of those items of bad history on your credit bureau report. And your credit bureau agents, either one of those three, or perhaps all three, that have bad credit history on you, you'll want to address each one of those items separately and make sure that they do put that information on your report. Then next, you'll want to talk to your creditors. Do you currently have an issue with a creditor that is being picked up as bad history on your report? Perhaps you have a creditor that you're currently making payments to, but you have a disputed amount on your credit bureau report. You'll have to have that creditor send some information to the credit bureau reporting agency, and have that fixed. But they are required, by law, to take care of anything that is on your report that is not accurate. Taking care of those items on your credit bureau report, having a good relationship with your current creditors, and making sure that you stay free from any debt related situations in the future is the best way to fix your credit report."