Bad credit can seriously affect your life, from an inability to make small purchases to losing a coveted job prospect. Many business check credit reports for insight on your responsibility with financial matters, and a bad score will tell them everything they need to know. You don’t have to allow your bad credit to haunt your daily life, though. With some time and effort, you can begin to repair your credit rating.
First of all, you need to obtain a copy of your credit report. You can get a free credit report once per year from a few different websites. A quick Internet search will find those sites for you. Once you have the report in hand, look over it for any possible credit reporting errors. These may be classed as a mistake when reporting late or missed payments, reports for someone with a similar name, or accounts opened by an identity thief. You may be surprised at the number of errors that appear on your credit report, but you can dispute the charges by calling the creditor. Most creditors will be happy to work with you to have those charges removed.
Next, you will need to focus on the accounts that have several late or missed payments. These reports will fall off of your credit report after approximately two years, but only if you manage to bring your account current and continue to make timely payments. Do not make the mistake of believing that one missed payment will not affect your score. It may only drop the actual score a few points, but the late or missed payment will be recorded for all future lenders to see. This can be the detail that causes you to be denied new credit.
If you have a loan default or a bankruptcy on your credit report, there is nothing you can do to make it disappear. Your best chances to bounce back are to continue to make timely payments to your creditors to show them that you are determined to better your credit history. You can apply for smaller credit cards, but do not use them for large purchases. Instead, make one small purchase per month and pay it off immediately when the bill arrives. This will help to build a better credit rating for you by showing that you can be responsible, but also by improving your debt to available credit ratio.