How to Repair Your Credit
When your credit score is low, your life is just plain hard. You will have trouble getting approved for loans, difficulty opening any new lines of credit, and you may even find yourself rejected from job applications and simple things like library cards. If you’re like most people, you may not be sure how to repair your credit score once it is damaged — there are ten basic steps you can take to repair your credit score.
Repairing Credit Score
To begin the process of repairing your credit score, follow these steps.
1. Stop Using Credit Cards
If you have bad credit, the worst thing you can do is keep adding debt by buying stuff with your credit cards. Your credit cards are probably what got you in trouble in the first place, so put your credit cards away until your credit score is better. Don’t close your credit cards, even when you pay them down to a zero balance. Closing a line of credit will affect your credit score negatively.
2. Get a Copy of Your Credit Report
Until you know how bad your credit is, you can’t start to fix it. It is easy to get a copy of your credit report. Remember that there are three credit bureaus to get a score from, and you really do need a number from each one. You never know which bureau a creditor will look at. Get your credit score and find out which accounts need attention.
3. Fix Your Credit Report
Many people’s credit reports contain bad information — the good news is you can have it removed. Your credit report will tell you how to dispute any inaccurate information.
4. Make Delinquent Accounts Current
Your payment history makes up a huge chunk of your credit score — 35% to be exact. Making payments and “getting current” has a huge impact on your credit score.
5. Stop Applying for Credit
While you are busy fixing your credit, stop applying for lines of credit. Every time you apply for credit, your credit score drops. You’ll probably just get rejected anyway, if you’re in “repair mode”.
6. Keep Accounts Open
Before you close any account, talk to a credit professional to make sure closing that account won’t have a further negative effect on your credit.
7. Talk to Your Creditors
Sometimes, a creditor will offer a temporary hardship solution to reduce your monthly payments until you can start making regular payments again.
8. Pay Off Your Debts
At some point you will actually have to start paying off debt. This is the simplest part of this process — start writing checks.
9. Get Professional Help
Use any resource available to you, from consumer credit counseling to help from a credit counseling agency. Find these through the National Foundation for Credit Counseling.
10. Play the Waiting Game
Be patient — your credit score went down slowly over time, so you can expect it to go up at the same pace. Fixing credit is really just a waiting game. As long as you’re doing the right thing, you can trust that your score is improving.
Bad credit isn’t the end of the world. If you follow these ten steps, you can be back in good standing with creditors in a matter of months.