Do It Yourself Credit Repair Tips

You can begin to clean up your credit score without a debt counselor by making timely credit card and bill payments, beginning to save, and reducing your debt.

Do It Yourself Credit Repair Tips
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Overview
If you've run into financial difficulties and now have a poor credit rating as a result, don't panic. There is a lot you can do on your own to repair your credit. In fact, most of what even the best credit counselors can do is limited to negotiating with creditors on your behalf for better terms and helping you improve your own money management skills. No one can get valid information removed from your credit report; accurate items cannot legally be removed before a specified time has elapsed.
Step 1
Order a copy of your credit report from each of the major credit reporting agencies (Experian, Equifax and TransUnion). Incorrect information on your credit history can damage your credit rating and undo your best efforts at credit repair. You are legally entitled to a copy of your credit report every year from each company, and they must remove erroneous items you report. To order your free reports go through the Federal Trade Commission's authorized provider (www.AnnualCreditReport.com).This is the only authorized source for free credit reports. There is a link to the FTC web page for this at the end of this article.
Step 2
Bring your monthly bills up-to-date and keep them that way. This is the single most important factor determining your credit score. (It counts for 35 percent.) If you currently have more bills than you can handle, consider getting a debt consolidation loan to reduce monthly payments. Make this your top priority because you can do more to repair your credit in this way than any other.
Step 3
Start saving at least a little money each month as soon as you can. If you are behind on bills this may not be possible right away, but it's a critical step because you cannot anticipate everything. The sooner you have an emergency reserve (even a few hundred dollars), the better. A cash reserve may keep you from getting behind on bills and undoing months of hard work when you are faced with unexpected expenses.
Step 4
Start reducing your total debt. Creditors compare the total amount of debt you have to your income. If you have too much they view you as a poor credit risk. For most people paying off existing debt is a long-term process and you will need to develop a budget and strategy and then stick to it for at least a couple of years.
Step 5
Call credit card lenders and have your credit limits reduced to eliminate unused available credit. Lenders view available credit as nearly the same as actual debt since you can use it at any time. Cutting out the excess is a quick way of reducing your "debt." Don't neglect to do this as you start to pay down credit card balances as well.
Step 6
Refrain from closing accounts unless you must and only apply for new credit if you absolutely have to. Frequent account changes are viewed as a sign of poor money management. If you must open or close an account, do so---this affects your credit score for less than a year and some activity is expected. But keep it to a minimum.
Step 7
Contact creditors you are having trouble paying on time. Many lenders will be willing to make arrangements to help you get and stay current on your payments and will not report moderate lateness if you honor such agreements. Some credit card issuers even have special programs to assist customers who are having trouble. Ask to speak to a credit manager and find out what your options are.
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tip
Do-it-yourself credit repair isn't impossible. However, if you already have a foreclosure, default or bankruptcy on your record, or if you are faced with a creditor unwilling to work with you, you may need to ask for help. If you reach that point you can find a reputable (and free) credit counseling service through the National Foundation for Credit Counseling (1-800-388-2227) or Consumer Credit Counseling Services (1-888-656-2227). Links to these nonprofit organizations are below.
tips
Do-it-yourself credit repair isn't impossible. However, if you already have a foreclosure, default or bankruptcy on your record, or if you are faced with a creditor unwilling to work with you, you may need to ask for help. If you reach that point you can find a reputable (and free) credit counseling service through the National Foundation for Credit Counseling (1-800-388-2227) or Consumer Credit Counseling Services (1-888-656-2227). Links to these nonprofit organizations are below.
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Resources
reference
The Scoring Game (How Credit Scores Work)
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Recovering from Bankruptcy (US News & World Report)
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Free Credit Reports (Federal Trade Commission)
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Consumer Credit Counseling Services
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National Foundation for Credit Counseling