If you have a bad credit record, don’t freak out! The solution is within your reach, all you have to do is decide to take the first step towards it.
First of all, you have to know where you’re standing. There are three major bureaus where you’ll need to ask for your credit report: Equifax, Experian and TransUnion. Additionally, you can get this document free once a year from Annual Credit Reports.
Take a good look at these reports and scores, which could be analyzed in several ways, so keep that in mind. Search for any possible mistakes and, if found, report them to clear your file.
You’ll need proof for your demands to be taken into account. Documents such as receipts and bank statements will back up your claims. The reporting agency should answer you between the next 30 days.
If you want to fix your bad credit, you should be more disciplined with your spending habits from now on. You can calculate your total income if you add all your money sources, like your salary or trust funds, and subtract your monthly expenses, such as gas or rent. The remaining amount should be what you destine to non-fixed expenses. That'll help you create a budget. Just stick to it!
You’ll also have to start paying your bills on time to clean your payment story. This means paying everything on time and in a consistent way. It’s pointless to do so only for a couple of months.
Surely, you’ve got one or more credit cards. Try to pay off their debts, as they also contribute to your bad credit. It’s important not to cancel them, because that could be counterproductive. You should use them as little as possible and stay always a safe distance from your limit.
Finally, if you want to improve your credit score, don’t apply for any new credit. Resist the temptation to sign up for a new credit card that offers extra bonuses or discounts!