How to Rebuild Credit for Free

As with most things in life, heading down is easier than going up. It's no different with your credit rating. Just a couple of missed or late payments on your credit cards or loans downgrades your credit rating, but building it back up takes longer. Many websites offer services to rebuild your credit for free, but they ultimately charge. Follow a few guidelines and you can rebuild your credit for free.

Instructions

1

Get your free credit reports from AnnualCreditReport.com. You can check your records held by Experian, Equifax and TransUnion in one place online annually. Click the link in the Resources section. Follow the simple instructions. Check your reports instantly and start to rebuild credit for free.

2

Check each report for mistakes. They happen easily and affect your credit status. Make careful notes of any mistakes. Contact the credit reporting bureau in writing. Provide details of each mistake and why it is wrong. Enclose a copy of the report, highlighting the mistake. Make certain you enclose any supporting documents. Provide your full name and address. If after investigation they agree that there is a mistake, they must correct it and inform the lender. The process usually takes 30 days and is the quickest way to rebuild credit for free.

3

Select areas of the credit reports that need improving. Check your payment history for each line of credit. Missed and late payments will be shown. They negatively affect your credit. Pay any arrears as soon as possible. Get payments up to date. Ensure that future payments are made on time. In a few months your payment history will be restored and your credit rating will begin to improve.

4

Check the credit report for credit cards that are up to, or close to, their limit. Reduce them as soon as you can. Keeping your balances less than 60 percent of the credit limit is good. Lenders become concerned when credit card balances are too close to the limit. They suspect financial difficulties and flag your report. Once the outstanding balance has been reduced, your credit will start to improve.

5

Pay your utility bills through automatic monthly payments. Utility companies report to credit reporting bureaus. Maintaining a good payment record rebuilds credit for free.