Bad Credit? Tips on How to Repair It

Many people these days have unfortunately ended up with bad credit. It can be because you have been sued or maybe you have had to declare bankruptcy. Do not despair there are simple and effective steps to take to repair your credit.
By knowing your legal rights, you can do a lot to get the bill collectors off your back and allow yourself to fix and build your credit back up. No ones credit is to "bad" to repair. As long as you have fixed the financial troubles that got you there in the first place. You will probably be able to find limited types of credit, which you can qualify and oIt can take up to two years to be able to fix your credit o you can obtain a major credit card or obtain a loan.

Here are some credit repair facts:

· The first sep in repairing your credit is as mentioned earlier is to turn the financial problems around that got your credit bad to begin with. You can do this by understanding your flow of income and expenses. You need to come up with a "budget" or if you would like to call it a "spending plan". This can be accomplished by taking at least two months writing down every expenditure you make. At the end of this period, compare your total expenses with your income. Then plan how you will spend your money each month. You can consider getting help from a nonprofit credit or debit-counseling agency that provides budgeting help free or at a low cost if you have problems working out a budget.

· Clean up your credit report. Credit bureaus get most of their data from creditors and collection agencies. They also search court records for lawsuits, judgments and bankruptcy filings. You need to obtain a copy of your credit report. There are three major credit bureaus; they are Equifax, Experian and TransUnion.

1. The Federal Fair Credit Reporting Act (FCRA) allows you to receive a copy of your credit report. You can obtain a free copy of your credit report if: You were turned down for credit because of information in your credit report. You must receive copy within 60 days of being denied credit.

2. You are unemployed and intend to apply for a job within 60 days following your request for your credit file.

3. If you are receiving public assistance.

4. If you believe your credit report, have errors due to fraud.

If you feel there are mistakes on your credit report you need to correct them as soon as possible. The first thing you need to do after you receive your credit report is to make a list of everything you find that is out of date, such as:

1. Lawsuits, paid tax liens, accounts handed over for collections, criminal records (but not criminal conviction), late payments and any other adverse information older than seven years.

2. Bankruptcies older than ten years.

The next thing is to look for incorrect or misleading information, such as:
1. Incorrect or incomplete name, address, phone number, social security number or employment information.
2. Bankruptcies that are not identified by their specific chapter number.
3. Accounts that are not yours or lawsuits in which you were not involved.
4. Incorrect account histories - such as late payments that you made on time.
5. Closed accounts listed as open, it may look as if you have too much open credit.
6. Accounts that are listed more than once.
7. Any account you closed that does not say, "closed by consumer".

If you find a problem, complete the "request for reinvestigation" form the credit bureau sent you or send a letter listing each incorrect item and explain exactly what is wrong. Once the credit bureau receives your request, they must investigate the items you dispute and contact you within 30 days. If you do not receive a reply within 30 days, send a follow up letter. If you inform them you are trying to obtain a mortgage or car loan, they can do a "rush" investigation.

· Other things you can do to repair your credit is after you have cleaned up your credit report, the key to getting your credit back on track is to get positive information into your record. For example:

1. If your credit report is missing accounts that you paid on time, send the credit bureaus a recent account statement and copies of cancelled checks showing your payment history ask this to be added to your report.

2. Creditors want to see evidence of stability, so if any following information is not on your report, send it to the bureaus and ask that it be added. Your current employment, your previous employment especially if you've been at your current job less than two years, your current residence, your telephone number, especially if it is unlisted; your date of birth, and your checking account number.

· Use credit to repair your credit. The main type of positive information creditors like to see in credit reports is credit payment history. If you have obtained a credit card, use it every month make small purchases and pay them off to avoid interest charges. If you do not have, credit cards apply for one. If you cannot get a credit card, try to find a cosigner or apply for a secured card - where you deposit money into a savings account and then get a credit card with a line of credit around the amount you deposited. Don't try to get a new credit card or use a credit card you still have if your still experiencing financial troubles.

It will usually take around two years to repair your credit so that you will not be turned down for a major credit card or loan. It may take up to four years for you to qualify for a mortgage. In some cases however, you may need to take immediate action or a more drastic action. It may be better to obtain an attorney for certain circumstance in severe bad credit situations.