How to: Credit Clean Up

Consumers and business stakeholders rely heavily on business and personal credit records to secure financial assistance in the form of loans or advances. Small businesses or start-ups may not yet have an established business credit history with vendors or other companies and must rely on personal credit for business purposes. Lenders typically require high credit scores before offering loans from banking or investment institutions, and credit cleanup becomes necessary when borrowers have less-than-sterling histories.

Instructions

1

Visit AnnualCreditReport.com to obtain a credit report for personal or business accounts. Provide a Social Security number for personal accounts or a federal employer identification number for businesses. The Federal Trade Commission authorizes this site and the company does not require sign up for "protection" services or unrelated information.

2

Contact credit reporting agencies to dispute any discrepancies in the credit report. Each of the three major reporting agencies offers dispute resolution through their websites. Experian, TransUnion and Equifax manage all major credit report transactions.

3

Develop a budget for finances that indicates how to pay off existing creditors and reduce the likelihood of any future negative credit report entries. Managing current creditors reduces negative entries from existing accounts and frees additional resources for rebuilding credit.

4

Take loans or secured debt and make regular payments to rebuild and enhance business or personal credit. Secured debt requires collateral, such as a car title or home mortgage, and offers a higher rate of acceptance than unsecured debt that relies entirely on credit history.

5

Monitor credit reports regularly for incorrect entries. Free annual reports and purchased additional reports allow users to track updates to their credit scores and histories. Careful monitoring helps prevent errors in the future.