How To Re Establish Your Credit
There is no magic to repairing your credit, but with hard work and discipline it can be rebuilt.
The first and most important step in reestablishing your credit is to avoid any further financial problems. Become financially responsible right away. Make a budget and stick to it.
The next step is to focus on your personal credit report. If you have unsatisfactory credit, it is because the information in your credit report is unsatisfactory or possibly inaccurate. If the information in your credit report is valid, it cannot be removed, even if the information is unsatisfactory. The main contributors to "bad" credit are:
Bills have been paid late or not at all
Too much debt has been accumulated
Information on your credit report may contain possible inaccuracies
Etc.
You should obtain a copy of your credit report to see what is being reported and to correct any errors. Given that information may differ between the three major credit bureaus, experts suggest a three-bureau merged report as opposed to a single-bureau report.
How do you correct errors on your credit report?
Once you have obtained a copy of your report detailing information from all three major credit reporting bureaus (Experian, Equifax and Trans Union), you should contact the credit agency that provided you with the credit report, to correct any outdated, inaccurate or ambiguous information. It is also a good idea to write to the credit grantor reporting the inaccurate information, including copies of any backup paperwork you may have. In cases of identity thefts you should inform the credit bureaus at once.
The Fair Credit Reporting Act of 1997 requires the bureaus to validate the information as accurate or remove it from your credit report. In most cases, there is a 30-day limit for the credit reporting agencies to resolve these disputes and you will receive written notice of the investigation results within five days of its completion.
The third step to rebuilding your credit is to begin using credit. Obtain a credit card if you do not have one, even if it is a secured card. Use this card a little each month to charge normal purchases such as groceries or gasoline. Then pay the card balance in full each month to avoid any additional charges. This way you will begin to develop a positive payment history, which is exactly what credit grantors are looking for.
The first and most important step in reestablishing your credit is to avoid any further financial problems. Become financially responsible right away. Make a budget and stick to it.
The next step is to focus on your personal credit report. If you have unsatisfactory credit, it is because the information in your credit report is unsatisfactory or possibly inaccurate. If the information in your credit report is valid, it cannot be removed, even if the information is unsatisfactory. The main contributors to "bad" credit are:
Bills have been paid late or not at all
Too much debt has been accumulated
Information on your credit report may contain possible inaccuracies
Etc.
You should obtain a copy of your credit report to see what is being reported and to correct any errors. Given that information may differ between the three major credit bureaus, experts suggest a three-bureau merged report as opposed to a single-bureau report.
How do you correct errors on your credit report?
Once you have obtained a copy of your report detailing information from all three major credit reporting bureaus (Experian, Equifax and Trans Union), you should contact the credit agency that provided you with the credit report, to correct any outdated, inaccurate or ambiguous information. It is also a good idea to write to the credit grantor reporting the inaccurate information, including copies of any backup paperwork you may have. In cases of identity thefts you should inform the credit bureaus at once.
The Fair Credit Reporting Act of 1997 requires the bureaus to validate the information as accurate or remove it from your credit report. In most cases, there is a 30-day limit for the credit reporting agencies to resolve these disputes and you will receive written notice of the investigation results within five days of its completion.
The third step to rebuilding your credit is to begin using credit. Obtain a credit card if you do not have one, even if it is a secured card. Use this card a little each month to charge normal purchases such as groceries or gasoline. Then pay the card balance in full each month to avoid any additional charges. This way you will begin to develop a positive payment history, which is exactly what credit grantors are looking for.
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