How to Fix Bad Credit

How do I fix my credit report?  Unfortunately, in the United States, a person’s credit rating can have a huge effect on a person’s life. A poor credit score can hinder a person’s ability to qualify for a credit card, or even worse, prevent a family from buying a home or car. In today’s material society, credit card companies thrive on people’s material wants, and sometimes, their inability to afford those coveted items. 

So, if your credit score is not what it should be because of your past financial mistakes, what can you do to fix bad credit? 

The most important thing to remember is that there is no miracle cure to fix bad credit. There are many credit repair services, which advertise on the Internet, in magazines and newspapers that make a profit from other people’s mistakes. For a fee, these companies promise to expunge your past financial mistakes from your credit file forever. Without doing something completely illegal, those companies may improve your credit rating, but they will not be able to erase any past financial blunders. And they also won’t make any changes to your file that you can’t make yourself, for free. 

So forget the credit repair companies, and settle in to do a little paperwork to help fix your bad credit… 

First, obtain at least one copy of your credit report from one of the three major credit bureaus in the U.S. (Equifax, Experian and Trans Union). They can be contacted in writing, via the phone or Internet. You may want to get a copy of all three reports since each bureau operates independently, and each report may contain different information. Also, if you'd like to obtain all the three bureaus credit reports in one place, we recommend . They make it much easier to get all three credit reports quickly and easily. The credit bureaus may charge you for a printed copy of your credit report, but it is a necessary expense to be able to see what information is contained within your file. 

Confirm that all information on the report is correct. You don’t want to add to your problems by having even more negative remarks on your credit report. To change an incorrect item, or repair a bad credit mark, begin by contacting the credit department of the company to which the payment violation occurred. Have all the proper documentation prepared to answer any questions the collection agent may ask of you. Start by explaining your situation and inquire about their process to amend a credit remark. Depending on the severity of payment violation, some collection agents/supervisors have the authorization to amend remarks to credit reports – all you have to do is ask. They may also require you to send documentation, such as copies of cancelled checks, to their office for verification, so be ready to provide that paperwork when necessary. Document any phone calls or mailings you send out by notating in who you spoke with, date and time. If you have any further problems or questions, you can speak to the same representative, and refer to your previous conversations. 

Obviously, this method won’t fix every item on your credit report, but will help resolve some of the smaller issues. If, in the past, you’ve defaulted on a loan or filed for bankruptcy, the best method to fix your bad credit is to be patient. The old saying, “time heals all wounds,” applies not only to broken hearts, but to credit ratings as well. Let time pass while keeping up with all mortgages, credit card payments, and any other expenditures on your monthly budget. Slowly build good credit while the old credit fades into your past and this will help fix bad credit on your part. 

One of the most common ways to start to fix bad credit is to use a home equity loan to consolidate your debt. This is a piece of advice you will get from almost any book or financial advisor that you refer to. The idea is if you have ' X ' dollars in credit card debt at 20% and you can get ' X ' dollars in a home equity loan at a lesser rate such as 9% than you will ultimately help in reducing your debt. If you want to look into home equity loans or other debt management solutions then we recommend as a great resource to start with. 

If you have bad credit, it can seem impossible to finance a car, find an apartment or just make purchases at the grocery store. Be patient and do what you can on a daily basis to make a difference in your financial future, because what you do today will someday be your credit history.

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