How To Fix Bad Credit
Recovering from bad financial decisions isn’t always easy, but you can do it if you know how to fix bad credit. Sometimes you spend too much or get in a bind and you need to rebound. It will take some work to repair any problems, but you can do it yourself.
- Get your credit report. You need to start the process of credit repair by finding out why you have bad credit. It seems easy to think it’s all because you haven’t paid your bills and maybe it is. It’s also possible there’s something in your credit report that’s giving you a bad credit rap. If you have bad credit you want to be sure you deserve it, so check your credit report to be sure there are no surprises. You can get a free credit report once per year from each of the three credit reporting bureaus, Equifax, Experian and TransUnion. Call each credit bureau to request a free report or visit the their official websites.
- If you need help, get it from a reliable source. Avoid companies that say they can fix your credit for a fee. These are usually rip offs. If you need help dealing with your creditors or making a plan, check for a non-profit consumer credit counseling agency in your community.
- Pay off debts. You have several options for this step. Negotiate lower interest and a payment schedule with the organizations you owe. If you have credit card debt, consolidate as much as you can on a low interest card, pay off the highest interest card first and pay more the minimum on all your credit cards. If the interest is too high or the payments are too much, approach your bank or credit union about a debt consolidation loan. Explore options for increasing your income, so you have money to pay off debts. These options can include: selling items you own but don’t need; getting a second job; or paring back your current spending.
- Reestablish good credit. Once you’ve taken care of the problems that caused you to have bad credit, you’ll have to build good credit again. The best way to do that is to pay your bills on time. If you’re going to use credit cards, keep your charges low so you can pay the bill in full. Paying off old bills and paying new ones promptly will help you get that awesome credit rating you deserve.