A Good Credit Score

A Good Credit Score

5 Steps to Repair Bad Credit

Bad credit is like a disease that has taken over the lives of tons of people in today’s consumer-driven world. Bad credit repair is not rocket science, though. It’s something that must be taken seriously and it has to be done with a proactive plan. The good news is that it is possible to repair bad credit, but the bad news is that it’s not exactly easy. Here are five steps to get you headed in the right direction.

1. Get a hold of your credit report

Before you can fix your credit, you need to get your hands on a credit report. All of the major credit report agencies offer one free report each year, so it won’t cost you anything to find out the truth. The problem for many consumers is that they don’t want to know the truth about their situation. They would rather go around living in the dark and believing that everything is fine. If you are serious about purchasing a house or getting your finances in order for the future, it is essential that you face up to the truth by going and getting your free report from one of the three credit reporting bureaus.

As an alternative, some credit counseling may be the best thing you can do. Sometimes having an objective person take a look at your credit report and generate some ideas like debt consolidation mortgages for repaying vehicle loans can really speed the process and help to get the emotion out of your planning process.

2. Bring all accounts current

The first thing you can do to move in the right direction is to move all of your accounts into a current, paid state. Nothing hurts your credit score worse than having accounts that you have just neglected. Each month that passes, your score will take another hit. There’s no quick bad credit fix, but this will get you on the right track and make you more focused on what has to be done.

3. Close old accounts

Once you have brought all of your accounts into a current state, you need to close them out. Take care of the debt that you owe, no matter how long it takes. This is the first step to raising your credit score and repairing bad credit. Once you have done that, close those accounts, cut up those credit cards, and get ready to move forward with your financial future.

4. Try to acquire a small line of credit

Though it might not seem like the most conventional way of doing things, you are going to want to get a hold of a new credit line. This does not mean that you need to go get a big credit card. Once you get your credit back into decent standing, lots of lenders will be looking to get their products out to you. Try a small credit card and use it sparingly, only so that you can make all of the payments on time. This will begin to establish a new record of good standing and it will be the first step in the road to fixing your credit.

5. Time heals all – Let your Credit Repair Itself

Luckily for all of us, time heals all mistakes, even financial ones. Even the ugliest of your accounts will be gone from your record in seven years. That might seem like a long time, but it will fly by if you let it. Change the way you keep up with your finances and be patient enough to know that time will help raise your credit score as much as anything else.