Consumers with bad credit should order copies of credit reports, study them, and ask credit reporting companies to correct inaccurate information, advises the Federal Trade Commission. To improve their credit, consumers should pay bills on time, keep card balances low, leave unused accounts open and negotiate with creditors, reports Entrepreneur.Continue Reading
Consumers are legally entitled to free annual credit reports from each of the three main credit reporting companies, according to the Federal Trade Commission. They should take advantage of this law to peruse their credit reports for mistakes. Although the companies cannot change any accurate negative credit information, they must investigate within 30 days if consumers claim that any information in the reports is erroneous. If the consumers' claims are verified, the credit reporting company must correct the error and inform the information provider and the other credit reporting companies.
If consumers have low credit scores, they can improve them by using sound financial strategies to rebuild their credit, explains Entrepreneur. For instance, late or missing payments cause credit scores to drop quickly, so consumers must make at least minimum payments on time every month. Even if they pay bills on time, they should also keep their credit card balances low to maximize credit scores. If they don't need all their credit card accounts, they should allow them to remain unused but not close them. If consumers are having trouble paying bills, they should negotiate with their creditors for lower monthly payments, lower interest or fee waivers.Learn more about Credit & Lending