How to Regain Your Credit

Taking control of your credit and building your score can help with loan approvals and interest rates on credit accounts. Factors such as late payments, collection accounts and huge balances have a negative impact on credit scores. Regaining or restoring your credit takes time. But once you resolve to reverse bad credit, you'll open the door to better financing options.

Instructions

1

Increase payments to get rid of credit card balances and installment loans faster. Make every effort to lower your debt balances to help bump up your credit score. Balances make up 30 percent of your score. Make biweekly payments to reduce how much you owe in interest, or add extra cash to monthly payments to pay down the principal.

2

Apply for new accounts when necessary only. Credit checks can decrease your FICO score. Limit inquiries, and complete applications for loans and credit cards when necessary to avoid a drop in scoring.

3

Track your due dates and pay on time. Payment history makes up 35 percent of scoring. Regain or restore your credit gradually by paying loans, credit cards and other bills on time. Creditors report late payments, and these negative items can cause further damage and prevent credit improvements.

4

Pay old debts to help you qualify for loans. Apply for loans only after you've paid off old collection accounts and charge-offs. Paying an old debt may not remove the account from your personal file. But as lenders and creditors update your account to "paid" status, this can help you qualify for financing.

5

Check your credit report (see Resources) and dispute errors or inaccuracies reported by your creditors. Review your own credit file at least once a year to make sure that your creditors and lenders are reporting accurate information. Report any misinformation such as erroneous late payments, collection accounts or outdated account balances.