I left college with more debt than I would have liked; I was unfortunately one of those duped into a terrible credit card that was offered in partnership through my school. While ostensibly it was supposed to teach me about prudent spending and fiscal responsibility, I of course forwent the lesson in order to indulge the brash and reckless behavior of youth. Sadly, that series of life choices has left me in a difficult place regarding my credit score and the host of problems stemming from having a bad one, including my difficulty with finding an apartment.
There’s a point in life when the stress just isn’t worth it anymore, and you can’t handle the situation you’re in anymore. You might not know what to do in desperate straits. To aide you, I’ve compiled a list of how I went about helping myself out of debt and into a better credit score. Below are a number of sure fire ways to repair your badly beaten credit reputation:
Secure a Copy of your Credit Report
Your first step to winning back your financial freedom is to order a copy of your own credit report and find out what it says about you.
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The three top credit bureaus used in the United States are Equifax, TransUnion and Experian. It is best, to be triply sure, to secure copies from all three institutions. Don’t overly worry about the cost as you can get each of them free once a year.
Understand What It Says
The fact is that nearly all credit reports contain one or more errors, which it why it is important for you to go through your reports one by one and note areas that are questionable or incorrect. Credit bureaus are merely tasked with producing the data; they are not required to verify each and every item on your report.
When perusing your credit report, make sure to identify any errors, such as typos, incomplete information and inaccurate or out-of-date postings.
Document and Dispute any Errors
Now that you have narrowed down all the inaccuracies on your report, you can start the process to dispute your score. Begin by writing a detailed letter clearly identifying each item that you want to contest, sending it along with a photocopy of your acquired credit report to the bureau in question. Make sure to also include any supporting documents that can verify your claims.
Resolve your Debts
With your credit reputation on the brink of collapse, it is time to tighten your belt and start dissolving your debts. List all of what you owe and, using this list, create a budget that includes how much you can pay on each debt. Do not hide from collectors; seek them out and work on an amenable payment plan that can work for you and your creditors. You can often negotiate for a lower bill or good interest rate.
Re-Build Your Credit History
There are a few other time-tested ways to begin your journey towards rebuilding your credit history. This includes opening and maintaining a savings account, acquiring a secured credit card and slowly working towards becoming debt-free.
Bouncing back from a less than impressive credit score takes time. Some situations will even require more than ten years to completely wipe clean a credit report, as is the case after a bankruptcy. Depending on how far your credit rating has plummeted, pulling it up to an acceptable score will require many years of consistent good standing. You can achieve this goal by paying bills on time, saving enough money in the bank and conscientiously managing your personal finances.
The situation is not hopeless and it is important to understand that you are not alone. Many people have gone through the process of repairing their credit score, and it is not an impossible goal despite how your situation might appear. With hard work, self-control, and dedication to the methods I’ve described here, you too can get back on your feet and start answering the phone again.
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Tim has learned about personal finance and debt reduction the hard way. He recommends using an auto payment calculator to set your budget before ever purchasing a vehicle. At http://www.onlineloancalculator.org/, you can even borrow their free widget for your own website.