Working Your Way towards Good Credit

If you are confronted with bad credit at this time, do not lose hope. You can do something about bad credit. The good news is, you can improve your credit score one step at a time and if you start taking action now, you should be able to see progress within the next six months.

If you are consistent, you can regain good credit in 12 months or sooner, depending on how bad the damage has been made. Check out the following tips on how you can improve bad credit:

Order your credit report. If you have not yet received your free report this year, you can request for your annual credit report at You can order all your three reports from the three bureaus (Experian, Equifax, TransUnion) at once or order one copy at a time throughout the year.

Dispute errors. If you find errors in your report, send a credit dispute letter to the bureau that issued your report via registered post mail. If the bureau fails to respond, send a follow-up letter with a copy of your original letter.

The bureau must act upon all consumer disputes as stated in the FCRA (Fair Credit Reporting Act). Within 30 days, the bureau must complete its investigation on the matter and if the dispute is found valid, the necessary corrections will be made and you will receive an updated copy of your report. If you can do this step successfully, it can instantly improve your bad credit score.

Pay down debts. Pay off as much as you can from your debts. Use your credit report to evaluate which of your accounts should be on top of your priority. If it’s not possible to pay all your creditors at once, see which of your accounts have the highest rates of interest and pay these first to prevent your debts from further accumulating.

Get a secured card. As soon as you are done with your payment obligations, you can apply for new credit to boost your credit score more quickly. One way to do this is to apply and look for the best secured credit cards. This type of card does not require good credit but you have to submit a security cash deposit as a guarantee for repayment.

Make sure that your secured card reports to the three major credit bureaus as it is the only way you can use the account for rebuilding bad credit. Use your secured credit card regularly for minimal purchases and pay off your full balance at once. After 12 months, you should be able to switch to an unsecured credit card account as a reward for your good performance.

Plan your spending. It is very important to create a financial plan so you can divide your monthly earnings according to your expenses. Having a written plan is also a great way to prevent overspending or uncontrolled spending. If you are having trouble following your budget plan, don’t forget to seek help from a trusted credit counsellor. A counsellor will be able to help you create a suitable plan and give proper advice on how to manage your finances.


About the Author:

Suzy Vanstrusen is a credit analyst and a writer on the website She has been providing consumers with tips and wise information about credit repair as well as helping you out more with your bad credit loans.  Copyright © 2011

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