If your credit is in disrepair there is no instant fix to rectify it, no matter how many advertisements abound from so called credit repair specialists promising the impossible. There are steps which you can take to repair your credit on your own, and most usually improvements can be seen within six months to two years, depending on just how bad the situation had become.
Everyone is entitled to a copy of their credit reports from the three main credit bureaus, TransUnion, Experian and Equifax. These can be obtained free of charge at the rate of one per annum. However if you have bad credit and have been turned down for credit because of this, you are entitled to another free report from the bureau which the lender used, providing you request it within sixty days of being declined.
When repairing your own credit the three major reports should be checked to ensure that only accurate information is recorded. You cannot have factual information removed but if there are any errors recorded then these can be rectified by contacting the bureau which holds the erroneous information. They are obliged to remove inaccurate information within thirty days. If any errors are recorded then removing them will have a positive impact on your credit score.
The most important step to repair bad credit is to ensure that all payments are met in a timely fashion, and that any outstanding late payments are brought up to date. Although previous late payments will remain on your credit file, their impact lessens when current bills are paid on time and a regular pattern of on time payments is established.
If balances are carried then the most crucial thing is to ensure that instalment loans are paid on time and that revolving credit balances receive at least the minimum monthly payment. The next step is to concentrate on reducing the balances which exceed 30% of available credit limits, thus pay down high balances beginning with the ones with the highest interest rate. Once the 30% debt to credit ratio is reached on one balance, turn to the next one and concentrate on lowering the balance to 30%.
It is not a good idea to open new credit lines whilst repairing credit, but if new credit is applied for it is more prudent to use secured credit cards rather than resort to sub prime lenders. Utilizing a secured credit card wisely will help to improve ones credit whilst at the same time necessitating savings to cover the security deposit.
If you hold old inactive credit cards these can be used to help to improve credit, as length of credit history is deemed important in credit scoring. Simply use them to make a small purchase and clear the balance in full at the end of the month.
Many people who have suffered financially and run up huge credit card debts have turned to debit cards and cash in favor of credit. This is a sensible move for those who are wary of future credit dealings, but it is important to remember that you need to use credit to maintain a good credit score once credit is repaired. However this can be achieved by simply using credit for small items and clearing balances in full. There is no truth to the myth that a small balance should be carried each month to keep good credit.
It is perfectly viable to repair your own credit, and companies which charge a fee for doing it should be avoided. It is far better to use any available funds towards paying down balances than to waste them on paying for credit repair which you can do on your own.