Your credit score can keep you from purchasing a home, car or even opening a checking account. To get your credit back on track, you will need to examine what is on your credit report. Obtaining a credit report will help you determine if the credit is accurate, and what steps you need to take to reverse the debt, so you can fix your credit score.
Ordering & Examining Your Credit Report
To repair your credit score, you must first know what your score is, and what is on your credit. That’s why it is necessary to order a copy of your credit report and carefully review everything listed on the report. There are three credit reporting agencies, therefore you will want to have a copy of each of the three credit reports, because the reports do not all list the same debts or creditors. To order your credit report, you may contact the credit agencies and pay for one, everyone is entitled to one free copy a year, or if you have been denied credit, you may request a copy of your credit report from the reporting agency.
When you have received your credit report, make sure you go over it accurately and thoroughly. If there are any mistakes listed on your credit report, you will need to dispute the charges. The creditors may be reporting an inaccurate amount of debt, or the debt may have been paid, but is still showing up on your credit report. For these instances, disputing any debts that should not be listed will help your credit score if the debts are inaccurate. You should document all disputes, so you have proof that you do not agree with the debts listed on your credit report.
Pay And Dissolve Debt
Once you have determined what debts are accurate, you will want to dissolve those debts immediately. You may do so by calling the creditor and arranging a payment plan or arrangement that will allow you to bring the account to a good standing. Some creditors will lower the required payment amount for a percentage off. Once the debt has been paid under the terms the creditor has agreed to, the debt will be removed from your credit report, and your credit score will go back up.
To improve or fix your credit score, you will need to stabilize your credit. You can do this by paying your current lines of credit on time, and this will reflect a positive payment history on your credit report. Do not overextend yourself, because you can end up back in debt like before, and your credit score will drop again.
Another way to fix your credit would be by filing for bankruptcy. There are rules and criteria that must be met before your debt is discharged. In the case your petition is granted, and creditors do not challenge your claims, the debt will be removed from your credit report. However, this will not automatically raise your credit score, but you may be offered credit in the future after the bankruptcy has discharged.