Help for bad credit starts with you. That is excellent news because that means you are in charge and in control of your financial future. However you do have to take action and follow through with your plan for credit repair. Remember to keep in mind that you are the main instrument of your help. Bad credit can't repair itself. Fortunately, raising your credit score does not have to cost you money as most, if not all of the information you need is available for free.
Just how do you apply credit repair first aid? Broadly speaking, you must build a better credit report and at the same time confront and reduce your debt. Ultimately, that is the only way you can hope to improve your credit rating. As you may know, all of your financial transactions involving credit help generate a file about you that is your credit report. Credit reporting companies, such as three nationwide bureaus, TransUnion, Equifax, and Experian sell this information to credit and loan companies, banks, insurance companies, and many other businesses such as car dealerships and research firms, and government agencies.
Credit bureaus collect four basic kinds of information that makes up a sort of "footprint" of your credit worthiness. The help you get for bad credit will depend in part on your understanding of this. Here is what you can expect to find in your credit report:
identification and employment information. This would include, name, address, social security number, income, spouse's name, previous addresses, and employment history.
Payment history. This is a record of your credit accounts and payment on debts as well as missed payments.
Credit inquiries. Credit reporting agencies keep a record of inquiries into your report made by creditors within the past year and a record of inquiries made for the purpose of employment for the past two years.
Information of public record. This includes such events as bankruptcies, foreclosures, tax liens, home purchases and sales.
Help with bad credit begins with you getting a copy of your credit report. What you may not know is that you are entitled to free copy of your report. The Free File Disclosure Rule of the Fair and Accurate Credit Transactions Act requires TransUnion, Equifax, and Experian to provide on your request a free copy every 12 months. Many private credit repair agencies, such as nationalcreditreport.com also make these available, but you can also request your copy through the Federal Trade Commission authorized site, annualcreditreport.com or by calling 1-877-322-8228.
Managing Your Debt
Dealing with debt depends your having an accurate understanding of your circumstances and which options are appropriate for you. For example, realistic budgeting, credit counseling, debt consolidation, or bankruptcy.
Normally, the first step in debt management is taking stock of how much money you have coming in versus how much you spend. You need to list all sources of income. You then list all fixed expenses that are the same from month to month, such as insurance payments, and then list variable expenses such as entertainment. The idea is to reduce expenses without shorting yourself on the basics, such as utilities, house payments, insurance, food, ans so forth.
The next basic step is to contact your your creditors and try to negotiate modified terms for repayment. If possible, try to reach your creditor before your accounts are turned over to a collection agency. If that should happen, try to work with the collection agency to reach an agreement
An additional option you may want to consider is credit counseling. If you are unable to create a workable budget or cannot work out a repayment plan with creditors or collection agencies, then you may want to consider professional help from a reputable business. Legitimate credit counseling businesses will help you analyze your finances and offer advice on money management and debts, and be able to help you devise a realistic budget. Counselors trained and certified in consumer credit and debt management can help you examine your entire financial picture and help you develop your own personal plan to resolve your credit repair problems.
Help for bad credit is available, but the first step starts with your decision to do something about it. Fixing your credit does not have to cost an arm and a leg, and as we have discussed, you can do this entirely for free. However, it does help to have the support of friends and family and even, in some cases, professional help to keep you on the path toward your goal of spotless credit.