Bad credit is something that will hang over your head for a very long time if you do not take immediate action. It can take years to build a great credit score, but just a few moments to ruin years of work. It is important to take action right away to help clear your bad credit.
The first step you need to do to clear your bad credit is to obtain a free copy of your credit report. You are eligible to receive a free copy once a year, and it is a good idea to do. You do not need to see it more than that, as pulling it often can sometimes hurt your score.
Look for an errors that may be on your credit report. If there happens to be any true errors on your report, you need to have those corrected. To do so, you need to write a letter to the credit reporting agency and send a long some documentation to back up that error.
Once you send in that letter, it can be up to 30 days before they will make a decision about the error. If in fact they do fix the error on your credit report, they will send you a new copy of your credit report, which doesn’t count as your free one for the year. You will also have to inform the creditor in writing about the error.
Take a look at the debt you do have that is valid on your credit report. If there are multiple credit cards you have, see if you can pay some off and cancel the cards. Multiple credit cards have a negative effect on your credit report because you have the potential of racking those cards up.
Work with creditors that you have past due accounts with to see if there is any way you can get back on track with payment plans. Chances are that they will be willing to work with you if you are willing to work with them. Make sure it is affordable so that you will be able to make the payments.
Even out the balances of your credit cards. You do not want to have potential creditors seeing a credit card that has reached it’s limit. Try to transfer some of the balances of one card onto another, one with a lower interest rate if possible. This will look better on your credit report, as well as lower your payment in interest.
There is a lot of ways that you can clear bad credit away from your credit report, but it is going to take some time and effort. You will want to do this so that you will have the ability to obtain credit in the future.