Go Over Your Credit Report
If you want to repair your credit, you will need to obtain credit reports from the following three credit bureaus; TransUnion, Experian and Equifax. As you look over the credit reports, you should look for any mistakes that the agencies made and if you see any, you should write letters to each of the agencies stating what the mistakes are and you should also send copies of receipts that prove you paid certain debts.
Don’t Apply for New Credit
Since you are already in debt and want to improve your credit history, you do should not make the mistake of applying for new credit cards or loans. Each time you apply for credit and the credit card companies deny you, this appears on your credit report and it will affect your credit history negatively. If there are things you want to buy, save up for them or use your current credit card.
Pay More Than The Minimum Balance
A common mistake people make in repairing credit is not paying more than the minimum balance on your bills because if you only pay the minimum on them, you will not succeed in eliminating debt but instead you are really paying down the interest. Resolve to pay as much of your debt as possible.
Negotiate for Different Balance
If you are struggling financially due to a job loss or health crisis, you want to contact the creditors and discuss the hardship. You also want to discuss the possibility of a new balance and payment plan that is within your budget. Most creditors are willing to accept what you can give them since they feel that it is better than not receiving anything at all.
Pay With Cash, Debit Cards or Checks
This is an excellent way to repair your credit because with these modes of payment you are using your own money to make the purchases rather than the credit cards that put you in more debt. To keep yourself from going overboard with using the debit card, you should take out a certain amount of cash from the ATM that you will need for the week then leave it at home for the rest of the week.
Open A Savings Account for Emergencies
You can repair your credit by opening a savings account because when you have emergency funds, you are less likely to use your credit cards for purchases or take out loans to fund your long-term goals. Take part of your check and add it to the savings account every week or two weeks.
When you repair your credit, you feel confident about your finances and you enjoy your employment better because you are less stressed out and angry. You will get along better with family and friends and you will have a sense of accomplishment because you disciplined yourself. Finally, credit repair gives you the opportunity to make a fresh start and learn new personal finance habits.