How to Change My Bad Credit History

As a consumer, you have a file, or credit report. Your file contains information, such as your address, Social Security number, outstanding amount on each of your debts and bankruptcies, if any. Your credit report also reflects your payment history. Creditors and landlords avail themselves of the information in your file to determine your creditworthiness. A negative credit history can prevent you from obtaining credit or qualifying for a lease. Fortunately, you can change a bad credit history.

Instructions

1

Request a free annual copy of your credit reports. You do not need to contact each of the three major credit reporting agencies, Experian, Equifax and TransUnion. You can order it online from AnnualCreditReport.com (see the Resources section). You also may mail in your request or submit it over the phone.

2

Analyze your report and determine if it contains any inaccuracies, which can have a negative effect on your credit rating. Look for accounts that do not belong to you or negative items that are more than seven years old.

3

Inform the credit reporting company of any inaccuracies. Send a letter explaining the inaccuracies and include copies of supporting documentation. Your letter should include your complete name, Social Security number and complete address. Circle or highlight the item that you are disputing. Make a copy of the report and include it with your letter. Once the inaccuracy is corrected or deleted, your credit score will likely improve.

4

Contact the creditor responsible for the inaccuracy. Explain why you dispute the item and include copies of any supporting documents.

5

Ask the credit reporting agencies to add accounts that do not appear in your credit file. Although your credit history includes most accounts, credit union, gasoline card and local retailer accounts are not always documented. If your bad credit is due to insufficient credit or using the majority of your credit limits, request that credit reporting companies add information from all accounts that will help raise your score.

6

Pay your bills on time. Accurate negative information will remain on your credit report for about seven years, according to Experian.com. Some bankruptcies can stay on the report for up to 10 years. However, paying your bills on time going forward can change your credit history for the better.

7

Pay off or settle old unpaid debt. If you cannot pay off the debt, contact the creditor and make a settlement offer. Ask the creditor to report the debt as "Paid in Full." Unpaid debts generally drop off your credit report after seven years. However, if you need to apply for a loan prior to that time, you will need to take care of the debt.