There is no quick solution for fixing your credit, contrary to what many credit repair companies advertise, report regulators at the Federal Trade Commission (FTC). Legitimate credit counselors do not make false claims and instead are upfront about the time and effort it will take to improve your credit rating. While a credit counselor may be the best course of action if you lack the ability to discipline yourself, there are steps you can take to fix your own credit.
Step 1
Order copies of your credit report from the three major credit-reporting agencies, TransUnion, Equifax and Experian. Consumers are provided the right to one free copy a year from each of the agencies. The only website that provides the free service is annualcreditreport.com.
Step 2
Review the report to make sure everything on it is accurate. Sometimes, payments are not recorded accurately or charges have been made on your open accounts that you did not make. Dispute the charges in writing to the account holder and the reporting agency. Financial consultants at the University of Washington Extension Center report there is no cost to dispute charges on your credit report. These accounts then can be amended and, once fixed, will raise your credit score.
Step 3
Visit your local banker or credit union representative and explain you are working on fixing your credit. If you have a checking or savings account with the bank, it is more willing to extend a limited amount of credit to you that you can begin paying on to raise your rating as you wait the seven years for bad reports to fall off. Every payment you make on time will help to raise your score and mitigate other detrimental actions.
Step 4
Ask the creditors that do not show up on your credit report to report your account activity. Many smaller retailers where you may be making payments on time do not automatically report to the credit bureaus. If they refuse, you can contact a credit-reporting agency and ask them to include the account, which they often will do for a fee.
Step 5
Obtain a credit line of equity or refinance your home to get enough money to pay off your overdue bills. By consolidating your bills into one payment, you may be better able to manage your runaway expenses and manage your credit better.
Tips and Warnings
- Call your creditors if you realize you must miss a payment. They often can renegotiate terms so you can make lower payments so you won't have to be late and hurt your credit rating.
- Signs that a credit repair company is scamming you include requests for money upfront before any services are provided and suggestions you try to create a new identify with an employer identification number that you can use to obtain credit instead of your Social Security number. Legitimate credit counselors will not tell you to avoid calling your creditors, nor will they tell you they can get rid of poor credit reports for a fee.
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