Tuesday, December 25, 2012

Can I Fix My Bad Credit Alone?

Yes you can! 

Here is some steps:

1. Get your credit report from. www.annualcreditreport.com
*You are allowed 1 free credit report a year. (or you can always apply for a card, get declined and then write the credit beau for your report. But that's much more annoying).

2. Find everything that you owe, possibly figure out how much debt you owe total.

3. Start calling each place 1 by 1. You have a few options. You can take a settlement amount...that you must pay upfront. This can be very low depending on how long the debt has been sitting there, but it looks worse on your credit.

Or you can set up a payment plan. In this case the company will often re-open your file, and the new ON TIME payments you make will reflect on your credit report. (This helps pay things down, and improve your credit)

**** ALWAYS request Receipts, and save them. If the company forgets to report it, you'll end up disputing it with the credit beaus, and you'll want proof you paid!

4. Cut up any current cards you have..etc. And do not borrow money until all this debt is paid.

*Once your all paid off. Then consider building your credit. I would avoid anything but a small loan. Maybe $2000. The reason I say loan not credit card. Its a fixed %, it has a specific pay off date. Revolving credit (credit cards), can spiral out of control quickly. 

*The judgment will the hardest to take care of. Most judgments stay on your credit 7-10 years...even if they are paid. So it will be a negative spot for a while. 

Good luck. We've been working on my boyfriends credit for 2 years. Its improved, but it just barely made it to the "fair" category this year. So I wouldn't expect a fast result in your score.