The 1st Step To Repair Bad Credit: Clearing Your Credit Report
All right, you just went through a hard time and you are now looking to get a new start. While you lost your job, got divorced or simply had too many credit cards pressuring your wallet, you missed a few payments. Maybe even worst, one of your accounts went to a collection agency or you were forced to declared bankruptcy. You are not alone in this situation and there are ways you can repair bad credit with an easy and simple method. We decided to help you out in this process by writing this 8 steps method to restore your credit bureau.
Recognize your mistakes and change your mindset
The very first thing to do even before looking at your finance is looking at yourself in a mirror. Sure mistakes happen, but you must learn from them. Therefore, you must look at the past and determine why you were not able to make the payments on time. Don’t stop at the first (and often easy) answers such as “I lost my job” or “my girlfriend dumped me and loaded my credit cards”. If you missed payments and went to a collection agency, you had underlying problems such as a lack of liquidity or the inability to save money on a monthly basis.
By changing your habits and creating an emergency fund, you will be in a better position to rebuild your credit. So determine a bi-weekly amount and make an automatic deposit into a separate account on your pay day. You will improve your ability to save money and create a good payment habit. The very first creditor should be you, no matter what.
Clear your Credit Bureau
Once you have changed your savings habit, it is time to order your credit bureau
. You need to know exactly what has been reported so you can make the necessary corrections. Even though you won’t be able to change what happened, you will at least be aware of what is lying in your credit report before requesting additional financing.
Once you identified your delinquent accounts, make sure that you pay them off and they don’t show an outstanding amount. If you declared bankruptcy, you will have to wait up to 7 years before the amount disappears. For late payments, you can pay what you owe and then ask for a confirmation letter from the creditor that your account is now up-to-date. Most financial institutions will request such document for additional lending.
Congratulation! You just completed the first step or repairing your credit report! Next week, we will look at how you can pay down your existing debts.
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