How to Fix Your Credit Report in 3 Months or Less

Whether applying for a mortgage, car loan or even if you are a candidate for a job, your credit history will likely be reviewed. You credit report is a snapshot for lenders of your financial responsibility. According to personal finance columnist for MSN Money Liz Pulliam Weston, more than 30 million Americans have bad marks on their credit reports. Poor credit will cause you to pay higher interest rates for loans and may even make you ineligible for a job. Fix your credit in three months by buckling down and making important financial changes.

Instructions

1

Request a copy of your credit report. You are permitted by law to get one free copy of your credit report each year. Go to annualcreditrepot.com and follow the instructions there to obtain your free credit report. Check the report thoroughly for any errors. Be sure your name is spelled correctly and any potentially negative information is correct. If you see an error on your credit report, contact the credit bureau for the appropriate steps to take to dispute the mistake.

2

Pay your bills on time. If you are late on a payment or fail to make a payment at all, it will likely be reported to the credit bureaus. Paying your bills on time for several consecutive months will increase your credit score. If you are strapped for cash one month, pay your car loan and mortgage payment before anything else. Both of these payments have a bigger impact on your credit score than other bills.

3

Reduce the balances you are carrying on your credit cards. It is important to keep your credit card balances below 30 percent of the available credit on each card. This will significantly improve your credit score quickly.

4

Do not close accounts. Although this may seem like a good idea, keeping credit card accounts open will boost your score--as long as you are not maxing them out. It will increase your credit limit to debt ratio, which is a big score booster.

5

Use older credit cards. The longer your credit history, the better it looks to the credit bureaus. If you have an old credit card but never use it, the credit card issuer might stop reporting to the credit bureaus. Use the cards for small purchases and pay the balance off in full each month.

6

Contact any creditors who have reported negatively to the credit bureaus. If you have a solid payment history with a lender, he may agree to erase one late payment from your account. Generally, the lender will require you to request this in writing. Call your lender and see how he can work with you. Even removing one or two late payments from your credit report can help significantly.