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Credit Repair : Doing it Yourself

Bad credit can cause a great many problems when you most need financial help. Although it is undeniable that occasionally debts get out of hand and payments are occasionally missed. Bad credit can destroy your ability to correct a bad situation by getting loans, credit cards or other financial assistance. If you have bad credit, you may be able to get a loan, but be required to pay usurious interest rates.

It is important to correct bad credit well before you may need a sparkling credit report, because lenders look at history as well as current obligations.
Although no one promised repairing bad credit would be easy, you can take some steps to facilitate the process.

The first step in the process of credit repair is to contact the major credit reporting agencies in your country. In the United States, those bureaus are Experian, Equifax and TRW.

One free annual report is available to each person who requests the document. It is imperative that you get a report from each agency. Each agency will present the report slightly differently and there may be errors or information on one that does not appear on one or more of the others.

Upon receiving the reports, make a working copy of each one. Using the copy, go through each report carefully, highlighting each error that you find.

You may want to color code the various types of errors. For example, you may find your name spelled incorrectly or differently on one or more reports. Some reports may report a number of previous addresses which no longer apply, or are incorrect. You may find accounts that are not yours or other errors including accounts appearing to be open when they have long since been paid off or closed.

In the United States the law provides that if you dispute the validity or accuracy of an item on the credit report, the information must be verified with the creditor.

If it is incorrect or cannot be verified, it must be removed from the report. If there are quite a number of these incorrect items, you should submit them a few at a time to the credit bureau, always making sure that you are continuing to chip away at deleting or correcting incorrect entries and eliminating false entries.

Once you've cleaned up and removed false, inaccurate or misleading information, you can concentrate on balancing your outstanding debt load. Showing either too much or too little in outstanding debt can limit your opportunities to be granted new credit. A good plan would be to determine how much credit you actually are likely to require in the next 3-5 years and then determine how you can best be sure that is the amount of credit which is available to you in case of need. For instance, if you are planning to buy a house in the time frame, your credit scores will need to be higher than if you are simply applying for a low-interest rate credit card.

If you need to add good quality lines of credit, consider a department store card or a gasoline fuel card and keep it in good standing. If you need to purchase a household appliance, using it to build your credit history kills two birds with one stone. It's important to remember that repairing credit will take time, but is well worth the effort.

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