Perhaps you knew what you were doing when you used your credit cards to buy things you really couldn't afford. Maybe you were never taught about money management. You may have even tried to use your credit cards to finance your life during a time of need – after a job loss or financial emergency. Regardless of the reason, your credit is now shot. The good news is that repairing your credit doesn't need to be as difficult as you imagine it to be.
Review Your Credit Reports
The first thing you need to do is order copies of all three major credit reports- the ones issued by Experian, Equifax, and TransUnion. Take your time and review the information shown on each report. Make sure that closed accounts show as closed, paid accounts show as paid, and that all of the accounts on your report actually belong to you. Take immediate action if you see any errors or inconsistencies. Some mistakes can be corrected through the credit bureaus but for others you will have to contact your creditors directly. Stay in touch with everyone involved until the corrections are finalized and make sure you keep documentation of every conversation you have.
Pay Your Bills in a Timely Manner
It may be hard right now but you have to become focused and try to pay your bills on time, all the time. This includes not only your credit card bills but your utilities as well. Even your cable company can report to the credit bureaus. Do your best to make sure everyone is paid on time every month. Your credit score will slowly but surely begin to improve.
Obtain New Credit
Repairing your credit does involve using credit. Sites like offer credit card options to those with questionable credit histories. You will use this card not to buy things but to make small purchases you can pay off right away. Do not max out this card or use it to make frivolous purchases. Use it for things you buy on a regular basis – like food, gas, or clothing – things you already have money for in your budget.
Repairing your credit will take a bit of time but if you are willing to put in some time and effort you will soon see major improvements. Take your time, make sure all of the details are accurate, and do your best to learn the difference between the things you want and the things you actually need. Your credit score will be on its way up in no time.