How to Fix My Credit in Texas

Texas law provides provisions and limitations for revolving credit accounts, judgments and other potentially negative items that can adversely affect your credit file. Such provisions protect you against abuses such as improper collection of debts and uncapped interest fees. If a past due or delinquent line of credit has triggered a drop in your credit rating, act with swift determination and take advantage of the public, private and state resources available to help you restore your credit file.

Instructions

1

Request and print your credit reports through Annual Credit Report's website. Texas residents receive one free annual credit report. Purchase additional credit reports through the three major nationwide credit reporting bureaus: Experian, TransUnion and Equifax.

2

Check your credit report for potentially negative items such as delinquent lines of credit, judgments and collection accounts. Look for the information provider next to each item.

3

Contact each information provider directly. Set up debt repayment plans for every past due or delinquent item on your credit reports. Credit services organizations are available to assist you. Such organizations are regulated and subject to state law as well as the provisions set forth by the Fair Credit Reporting Act.

4

Negotiate a reduction or cancellation of penalty fees, if possible. Texas law limits judgment interest to the rate specified in your original loan contract, which may be a variable rate or 18 percent a year. All other lines of credit are subject to a maximum interest fee of $2,000 or 20 percent of the amount of the principal, whichever is less, according to Texas law.

5

Settle lines of credit. If you cannot budget yourself out of debt, negotiate a settlement. Start your negotiations low. The age of a line of credit matters, so offer your creditors pennies on the dollar for lines of credit 90 days or more past due. Base your settlement offer on the percentage or amount you can reasonably afford to pay.

6

Request a lower interest rate on all credit accounts. The maximum interest rate is 10 percent a year, according to Texas statute, which is only applicable to banks chartered in Texas. Contact your creditor directly. Request a more favorable interest rate. Outline your plan to repay all outstanding debts and restore your credit rating. Even a small reduction in interest fees saves you money, which you can apply toward paying off outstanding debts.

7

Maintain a low card utilization rate. Kiplinger Magazine, a resource for money management, suggests retaining low card balances of 30 percent or less of your credit line.