How Do I Repair My Credit Rating

One of the most common questions that I am asked is how to repair my credit rating. If you want to know how to repair your credit rating, there are some steps that you can follow to make it happen, and you don’t need specialized companies to consolidate your debt, nor do you need to take out debt consolidation loans or do a balance transfer, although these things do help you reduce your debt in order to ease the strain of the bills, they will not fix your credit rating as much as some other things that you can do.

If I were going to begin to fix my credit rating the first thing that I would recommend and do is to pull a copy of your credit report. This is actually fairly easy to do and will likely cost you nothing. The law states that you can have one free credit report per year no matter what, as well as obtaining a free copy of any credit report that was used in a decision to deny your application. This allows consumers to make sure that the information on the credit report is accurate and that no one is using their identity to get loans or taking out credit cards in their name.

To begin to repair my credit score by looking at my report I would use www.annualcreditreport.com, a website set up by the three major credit reporting bureaus to comply with this law. If you can verify your information then you can see a copy of your current credit report and begin your credit report repair. If there is inaccurate information listed on the report then you can do a credit dispute with each of the bureaus that the information is listed on and get them to remove it. This is the first step in fixing your credit score: making sure that the information on your report is accurate.

If everything is correct then your next step should be to organize your bills. Put the items on your credit report in three categories. First, debts that have had recent activity, within the past year. Next, debts that have had no activity within the past five years. Finally, put everything else in the middle category. Debts automatically are taken off your credit report after seven years of inactivity unless they are student loans or the company decides to re-list the debt, so don’t worry about the last category for now, as they may be dropped off, or close to dropping off by the time we get done fixing categories one and two.

Out of the two remaining, worry about the debts that are within the past year first. These debts affect your credit report the most and will be the ones that you’ll want to take care of right away. Deal with one debt at a time and try to have the money for the debt in your hand before you call the creditor. Then, negotiate for complete removal of the debt from your credit report. When all of the debts within the past year are dealt with then you can begin working on the second category, again going for complete removal if possible. Once you have this process started, use secured credit cards or any other financing that reports to the bureaus to build up a positive credit history.