Having bad credit and debit can be very stressful and harmful to your health. You need to take a different outlook on how your money is being spent and focus on the important things in life. Having a low credit score puts limits on your finances and needs to be fixed. Below I have outlined a series of steps that will get you started in repairing your credit and get you back on your feet.
First you will need to request a credit report from all 3 Credit Bureaus. This can be done on line by visiting https://annualcreditreport.com or by calling 877-322-8228. You are entitled to all 3 credit reports for free every year.
Review each credit report carefully and dispute any errors you find by contacting the creditor that reported the error. If any disputes are found to be resulting from outstanding debts try to repay them as quickly as possible. Any legit errors that are found, ask the creditor if they can contact the bureau on your behalf to fix the error.
If there is any suspicion of fraud taking place, like accounts opened that you have not opened, call the credit bureau at once to have a 90 day fraud alert place on your credit report. It’s only necessary to call 1 credit bureau as they will notify the other 2 for you. If the fraud activity is serious, you should contact the local authorities to file a police report. With a police report you can have a 7 year fraud alert placed on your credit report.
If your debts are overwhelming, then you will need to contact a nonprofit credit counseling organization to work for a debt consolidation plan. A counselor will help you by consolidating your debts and contacting debtors on your behalf for reducing your financial charges.
Close your credit accounts and cancel credit cards. If you need to raise money to pay off your debts, you may need to liquidate some of your assets. Until you are caught up on your bills, you will need to cut back to the bare essentials to maintain a normal life.
Collaborate with your credit counselor to repay all your debts. Pay the necessary bills like rent and utilities and maintain a savings and checking account.
Once you have repaid all your debts, you can request a new credit card to start building a good credit. Don’t charge what you don’t have and pay off the balance of the credit card every month to maintain a good credit rating.
You can improve your credit rating by maintaining a good payment record. Keeping the credit inquiries to a minimum may also help your credit rating whenever you request a credit card.