How do you repair bad credit?


Quick Answer

To repair bad credit, fix any errors on your credit report, set up automatic payments and decrease your debt. Making timely payments and being patient are helpful, but credit counseling can be a valuable tool if you have trouble staying organized.

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Full Answer

  1. Fix errors on your credit report

    Get a free copy of your credit report from AnnualCreditReport.com. Analyze the report for mistakes, particularly for the amounts of open accounts and payments wrongly recorded as being late. If you find errors, report them to the credit bureau and creditors.

  2. Create a budget and make timely payments

    Set up a budget that allots your spending on both a weekly and monthly basis. Decrease your debt by paying on time. Automatic electronic payments or payment reminders help with this. Also, stop using or reduce reliance on credit cards. Aim to pay down high-interest accounts first.

  3. Contact your creditors

    Call your creditors to request a reduction in the amount you owe or to explain that you have a method to address late payments. Explain your situation and your payoff plan.

  4. Seek out legitimate, nonprofit credit counseling

    Check with universities, credit unions and housing authorities to find legitimate credit counseling if you are having problems sticking to your budget or remembering to make payments.

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