Credit Report Disputes

• Credit report disputes can restore your credit rating significantly, according to the Divorcenet legal website. The law allows you to order free credit reports every year from annualcreditreport.com, find errors in as many items as possible and dispute them. The credit bureaus get 30 days to confirm their data with your creditors. This method is not 100 percent reliable because some creditors will provide corrections or verifications, but many simply ignore the inquiries. Sometimes the credit bureaus themselves are too busy to conduct investigations. They have to erase data that is not validated for any reason.
  
  

On-Time Payments

• You influence 35 percent of your credit score with your bill repayment history. The MyFICO website recommends catching up any late accounts as an important credit restoration step. Keep paying on time once you get your bills back on track. This is an extremely reliable credit restoration step because your good payment record appears on your credit reports, and your credit score relies most heavily on your recent activity.
  
  

Debt Reduction

• High revolving debt hurts your credit score. Credit cards are the most common type of revolving accounts, so the MyFICO website recommends paying them down as much as possible to restore damaged credit. Send more than the minimum required payment every month as a reliable way to drop your balance fast. The Motley Fool financial website recommends putting the most money on higher-interest accounts. Shift the extra funds to other accounts as soon as some bills are paid off.
  
  

Account Settlements

• Settlements on charged-off accounts and bills that have gone to collection agencies do not reliably restore your credit unless you negotiate a positive change in status. Paid charge-offs and collection accounts look almost as bad as unpaid bills. Negotiate a change to "paid as agreed" or a complete removal of such accounts as a condition of paying them. You can often settle for less than the original balance if you offer a lump sum. Your agreement is only reliable if you get it in writing, which forces the creditor to make the agreed-upon change.