The first step to credit score repair is to recognize that you have a credit problem! When the interest rates on your credit cards are rising faster than the price of gas, you have a credit problem. When your credit score is sinking faster than a rock, you have a credit problem. When the only lender who will talk to you is the pay-day loan store, you have a credit problem. Now, here are some basic steps you can start taking today to fix your bad credit.
1. Get a copy of your credit report. This step is not only fast, but also free. You have a right to a copy of your credit report from each of the three major credit reporting bureaus once a year. Got to annualcreditreport.com to view and print your credit reports. This is the website sponsored by the three major credit bureaus, and you don't have to buy any of the additional services they will offer you in order to get your credit report.
2. To help make credit score repair easier make sure to review your credit reports. Look for inconsistencies accross the different reports. Use the techniques from the credit secrets bible to pick apart and analyze your reports, and decide on the best strategy for credit score repair... what to dispute, what to leave alone, etc. Do NOT, as some misguided people suggest, dispute all the negative info as "not mine". Doing so is just a good way to waste postage and have your disputes ignored by the credit bureaus.
3. Lower your debt-to-credit ratio. This is the amount of money you owe lenders compared to your high credit limit. You should do two things to improve your debt-to-credit ratio. Reduce your outstanding balances on your credit cards and loans to lower your level of debt. This is easier said than done, but if you scrimp on the nice-to-haves in your life today and apply that extra money to paying down your debt, you are on your way to fixing your credit problems.
The second way to lower your ratio is to increase your high credit limit. Sub-prime merchandise cards are one way to do this when your credit score is less than excellent. A sub-prime merchandise card is not like a VISA or MasterCard, but lets you buy from selected vendors (often the company that issued the card). Just make sure that the issuer reports to the credit bureaus before getting the card.
4. Take good care of your credit. Pay on time and with cash. Don't fall behind in your payments or apply for any new credit accounts (except where needed to lower your debt to credit ratio) while you're working to fix your credit. Doing so will just hinder your credit score repair efforts.
As simple as it may sound, this is really all there it to it. Yes, there are certainly some nitty gritty details to credit score repair that we couldn't cover in a short article like this, but this basic over view should at least help you to get a good healthy start towards fixing your credit.
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