Help for My Credit

Credit, in the form of revolving credit card accounts and fixed term loans, gives you buying power but also builds up debt. Help is available, whether you are just starting to have bill paying problems or are already delinquent on most or all of your accounts. Assistance comes in simple forms, like financial management education and more involved measures like debt management plans and bankruptcy filings.

Credit Counseling

Credit counseling helps your credit by providing customized assistance, such as teaching you money management or budgeting techniques, going over your bills and making budget suggestions and referring you to financial education. Many counseling firms have free information on their websites for self help. Choose a non-profit counseling firm and get an up-front disclosure of any fees. The most reliable firms are financed mainly by creditor contributions, according to the Better Business Bureau. The National Foundation for Credit Counseling, a professional group, gives referrals to local counselors.

Debt Management Plans

Debt management plans, which credit counseling firms administer, give you a structured framework in which to repay your debt, usually within three to four years. Your credit is helped because credit counselors often convince your creditors to deduct late payment fees, drop interest rates and change your delinquent accounts to on-time status with the credit bureaus as long as you follow the payment plan, according to the Bankrate financial site. Your payments go to the counseling firm, which redistributes them to the appropriate accounts.

Bankruptcy

Bankruptcy releases you from responsibility for some or all of your debts, but it devastates your credit rating and sometimes requires you to liquidate your property. Chapter 7 bankruptcy has the most impact because it releases you from almost all of your bills and forces the sale of most of your assets, according to the Federal Trade Commission. Chapter 13 bankruptcy is milder, allowing you to keep much of your property but requiring you to partially pay some bills. Bankruptcy is a court action that shows up on your credit reports for 10 years and federal law requires you to go through counseling before filing and a post-bankruptcy money management class.

Credit Report Clean-Up

Help your credit quickly by checking your credit reports through the website AnnualCreditReport.com, which provides them for free every 12 months, and disputing incorrect information with TransUnion, Experian and Equifax, the FTC explains. The bureaus do not monitor your data for accuracy but you can report mistakes through their online forms, which gives them 30 days to investigate and fix or eliminate the information. Your credit rating improves once the negative entries are gone.