How to Clean Up Bad Credit Reports

There are any number of reasons to avoid a bad credit rating. Bad credit marks you as a risk to lenders, and sometimes landlords or potential employers. Even if you can get a loan, you'll likely be stuck with a higher-than-average interest rate. Although it is much easier to hurt your credit than fix it, there is hope for reviving it as long as you are consistent and determined.

Instructions

1

Keep an eye on your credit report at least yearly. You will be able to spot and dispute false negative or fraudulent action on your account. Make sure your creditors report your transactions correctly. If not, dispute it with the credit agency immediately. You can get your credit report online, typically for a small fee.

2

Make regular payments on all of your debts. Even if you are only able to make the minimum payment, be sure to pay it on time. Late payments usually result in late fees as well as further negative marks against your credit rating.

3

Pay down your balances as quickly as you can. Lenders see consumers as less of a risk if they are using 30% or less of their available credit, according to financial expert Liz Pulliam Weston. If you have extra money at the end of the month, use it to pay down balances. You should also stop using your credit cards whenever possible.

4

If you absolutely must use a credit card, use the oldest one. Older credit history is better than new since it establishes what kind of consumer you are.