Whether you have poor credit or are looking to improve your credit for a large purchase such as a vehicle or a new home, you can repair your own credit through diligence and attention to detail. By looking over your credit reports and fixing any misinformation contained therein, you can better your credit situation by yourself.
Revolving Debt
Plan a budget on a spreadsheet. This will allow you to see where you spend money and what areas you can adjust so that you can use any extra money to pay off debt. The best way to repair credit is to pay it off, but keep those credit cards open. The open credit cards with low balances indicate your credit responsibility and the fact that credit card companies trust you enough to give you lines of unsecured credit.
Pay all of your payments on time. One way to help repair your credit is to make sure that all outstanding revolving debt payments are paid on time. When you have six months straight of on-time payments, your credit score goes up.
Reduce your debt-to-income ratio. If you carry too much debt compared to the amount of income you bring in, your credit will suffer and it will be more difficult to obtain credit in the future. To repair your credit, pay down some of the balance on your credit cards and over time, your credit will get better.
Credit Reporting
Order your credit reports online and examine them for incorrect items and outdated information. It is important that consumers take a look at their credit reports yearly for inaccuracies. You are entitled to free yearly reports, so take advantage of this and print them out.
Write letters to dispute any inaccuracies on your report. Due to fraud and misinformation, information on your credit report may be inaccurate or incorrectly reported. It is your job to inform each credit report company of any inaccuracies on your credit report. If the inaccuracies are truly wrong, they will be removed and this will help you repair your credit. Document the process and keep all of the information that the credit reporting agencies send you.
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