Ways to Repair Bad Credit

There are many different ways to repair bad credit. Consider how bad the credit is based on the facts of the credit report. A credit report with many accounts in default needs more rigorous fixing than a report with a few late payments here and there

The most important rule of credit repair is to start today. Make sure to get a copy of your credit report so you know where you are starting from.

As you read this, think about which of these ways to repair bad credit you can implement immediately and start today.

Stop spending, create a budget and use all of your available extra cash to bring your accounts current, if possible. If you really can’t bring the accounts current, call up your creditors and make arrangement to do this over time. Ask for concessions such as a lower interest rate or for them to waive some of the late fees, especially if you keep your end of the bargain and make the agreed payments over time.

Most importantly, remain optimistic, be persistent and chip at it every week. Make an action plan of what you need to do for a month at a time and follow through on your plans. If you feel overwhelmed, seek bad credit repair counseling.

There are many non-profit agencies that will assist you in creating a workable plan and sorting out your credit mess for free or a small fee. It will be well worth it.

Scour your credit report and make sure that there are no inaccuracies. If you find anything in error, do credit bureau disputes where the bureau will investigate and remove the inaccuracy within 30 days. You cannot remove accurate information. It must run it’s course. But by paying your current obligations on time, you are creating a new history that lenders will view favorably.

Usually negative information stays on the report for 7 years, except bankruptcies which stays for 10 years and unpaid tax liens which stays for 15 years. Some bankruptcy chapters, such as Chapter 13, only stay for 7. Requests for credit histories stay for 2 years and can affect your credit score.

Lenders looking to grant credit look to see if there have been too many recent inquiries suggesting that you might have applied and even received credit that is yet too new to show up on your credit report.

Do not pay off revolving loans like credit cards and close the accounts. That negatively affects your credit because you are actually reducing your borrowing power. Once you have that borrowing power, never let it go. Freeze the credit cards in ice, put them in a safe deposit box or give them to your mother or trusted best friend to keep. Whatever, you do, just don’t use them again while you are trying to fix your bad credit report.

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