Most people have credit problems at one time or another. It can stem from something as simple as a late payment, or be a complex string of problems, such as those that arise from a divorce, medical emergency, or business failure. There are several ways that you can work on repairing your credit. Having a good credit score helps you get better interest rates on credit cards, home loans, and auto loans. That means that a good credit score will save you money.
The first thing that you need to do to improve your credit is be aware of what your credit reports say. At this time, there is only one truly free source of credit reports that I am aware of, and that is www.annualcreditreport.com. Once a year, you can check your Experian, TransUnion, and Equifax credit reports all at one time, and all for free. The best part of this process is the fact that you can now dispute discrepancies in your credit report at one time.
The first thing that you are going to do to improve your credit is create a budget, and make a list of all of your debts. You need to begin paying all of your bills on time. That is because most negative items last 7 to 10 years on your credit report. In a worst case scenario, you might have to just wait it out. Start paying on time to build good credit.
The next thing that you want to do to improve your credit is go online and look at all three versions of your credit report. Dispute every negative item that is listed on all three of the credit reports. The credit reporting agencies are required to confirm the negative items, and if they cannot do this, they will automatically remove it when they are done with the investigation. You can do this every year, and it will help get off some of the items. This is the best that you can do. Don’t pay anybody who claims to be able to clean up your credit.
You will get an email when the credit companies have finished reviewing your file. Go online and see what was done, and print out each of your credit reports. Now you have to get creative. Contact the companies that you still have negative debts with, and see what you can work out with them. Ask them outright to remove the negative statement from your credit report, and set up payment plans if you need to. Do whatever it takes to resolve the debts and clean up your credit report. If you can’t get negative items removed, add a statement to your credit report explaining that you paid the debt, or why the debt is not yours.
For more complicated cases, you may need legal advice. Search for free credit counseling agencies in your area. There are many agencies that will consolidate your debt, and then take a monthly payment from you in return. Beware of these, since they often negotiate lower interest rates on your behalf. This is great for you and your budget, but can be bad for your credit rating, since you often go into default status, or have your accounts closed. Seek free credit counseling advice from a nonprofit organization first. For help finding a credit counseling agency to help you, the Department of Justice has a listing of approved agencies at its website www.usdoj.gov.