How to Cleanup Your Derogatory Credit

Derogatory credit can create problems if you approach a lender for a loan or apply for another type of credit. Lenders and creditors view credit reports beforehand, approving only applicants with proven track records. Maintaining good credit habits betters your chances of being considered creditworthy by a lender. Even if you have made serious mistakes and ruined your credit, you still can clean up your history and rebuild your score.

Instructions

1

Ordering your free credit reports from AnnualCreditReport.com. Challenge derogatory information, such as delinquencies, charge-offs and collection accounts reported by mistake. Removal of this information can boost your score. Write creditors to contest the debt or file a complaint online at AnnualCreditReport.com.

2

Reverse damage caused by late or skipped payments. Pay your bills, for credit cards and loans, prior to the due date to mend your bad payment history with creditors. Reports of regular timely payments can increase your score and improve your creditworthiness.

3

Broaden the gap between your credit limit and what you owe creditors. Maintaining credit-card balances that are near the limit hurts your score. Add points to your credit score by paying down balances.

4

Pay any past-due balances. Do not disregard charge-offs and collection accounts by leaving unpaid accounts on your credit report. Paid charge-offs, collections and judgments are better for your credit score. Speak with the creditor that controls the account and propose a pay plan to settle outstanding bills.