If you are labeled a high risk for credit, it can be difficult to open a new credit card account or get approved for a loan. Businesses typically look at an individual's credit score to determine how risky it is to extend the person a line of credit. The credit scores range is 300 to 800. Most companies use 620 as the cutoff and label individuals with a lower score as high risk. You can take steps to fix your credit on your own.
Step 1
Review your credit report. Every year, you are eligible to receive a free credit report from the three consumer reporting agencies: Equifax, Experian, and TransUnion. Access these reports from the FTC approved website Annual Credit Report. Examine the reports to check for errors and defaulted accounts.
Step 2
Dispute any inaccurate information. If you find incorrect information on your credit report, contact the agency in writing to get the item removed. Include your name, credit report number, contact information and explain why the item in question is incorrect. Include a copy of your credit report with the item highlighted and documentation that supports your claim, like payment stubs. If your claim is found valid, the company will remove the item in question.
Step 3
Call the credit card companies that have reported negative information about your account. If you have made only a couple of late payments, the company might be willing to remove them from your payment record. If you have the ability, offer a cash settlement to accounts you have defaulted on.
Step 4
Rebuild your credit. Apply for a secured credit card. With a secured credit card, you deposit a certain amount of money in the account. The money you have deposited is the limit for the card. The card you choose should regularly report to the major credit bureaus.
Step 5
Wait it out. If you are labeled high risk, time can improve your credit rating. Negative information is only permitted to stay on your credit report for a maximum of seven years.
