Bad Credit Gone

Is bad credit haunting you? If you are unable to get approval for credit card applications or personal loans, it is possible you have bad credit.

To check your credit score, you have to get your credit reports from the three major credit bureaus. They are Experian, Trans Union and Equifax. A more convenient way is to order a 3-in-1 report that contain you credit score as well.

If your credit score is 620 or less, in means your credit rating is bad. There are many factors that can contribute to a low credit score. However, at this point, we shall focus on pushing your credit score to a more acceptable level.

The first step is to check what is inside your credit reports. Look out for negative records such as late payment, debts that were acquired by another person, accounts shown as open that were long closed and any other unusual records. Contact the credit bureaus to remove as many of them as possible. Also look out for minor faults such as incorrect name, age, address and so forth. Get them corrected as soon as you can.

The second step is to add as many positive records as you can to your credit reports. When you review the three reports, you will realize that they are not identical. There will be positive records in one report which are missing in another. Contact each bureau and ask them to add the positive records to your credit report.

The third step is to review your payment history. How often are you late on payment? Start setting a budget for your monthly bill payment. These include utility bills, cell-phone bills, mortgage payment, credit card balance and so forth.

If you have large credit card debt that make it difficult for you to pay even the minimum amount, you need to call your creditors and ask for a reduction in interest rate or even an short term interest freeze. Let them know your problem and your proposed solution. They may not grant your request immediately but keep up your efforts. Druing this phase, try to keep your repayment steady and consistent. As long as you keep your repayment on good standing, they may grant your request.

Your payment history plays an critical role in the credit score calculation. So this is a crucial step. Pay all your bills promptly.

The fourth step is to stop using your existing credit cards and come with a plan to eliminate your debt. If you do not know how to do this, visit your local library and read up on books related to debt elimination.

The fifth step is to apply for a secured credit card. This type of card work like a normal credit card but it require you to have a cash deposit or saving account with the card issuer. The amount deposited in the account will be the collateral as well as the credit limit. This will stop you from getting into more debt but still provide you the convenience of credit card purchase. More importantly, your usage of the card is reported back to the three bureaus. This means that you have a good chance to rebuild your credit history.

Restoring your credit score will take some times. It will not happen overnight. Stick with the five steps above and you should see some credit score improvement very soon.