What to Do to Fix Your Credit

The credit data in your TransUnion, Experian and Equifax reports is reviewed by banks, loan companies, landlords, insurers and human resources departments, according to MSN Money writer Liz Weston. Bad credit needs fixing to give you maximum access to loans, credit cards, housing, insurance and jobs. Some strategies take time, while others improve your credit records within a month or two.

Catch Up Payments

Late payments hurt your credit every month if you do not catch them up. Clear up the past due balances on your credit cards, loans and other bills as soon as possible, even if it means cutting little treats out of your budget. Thirty-five percent of your credit score depends on how promptly you pay, according to Fair Isaac Corp.'s MyFICO scoring site, so sacrificing restaurant meals, a new shirt or fancy coffees to get your bills current pays big dividends in fixing your credit.

Prevent Delinquencies

Set up automatic payments on as many bills as possible once you get all your accounts caught up. Every payment made by the deadline improves your credit rating, and your credit score goes up as you establish a good record. Automatic withdrawals prevent late payments that would otherwise sabotage your credit fixing efforts, according to Weston.

Pay Down Debts

Weston advises that paying a significant amount of money on your highest bills is a fast credit fix if you can afford it. Paying down a big debt can make a difference in your credit score in just 30 days. Get the same effect over time by paying more than the minimum due on your credit cards if you cannot pay the whole balance at once. The Motley Fool website recommends putting the most money on your highest-interest rate credit card until it is paid off, then redirecting the extra funds to the next highest interest card.

Fix Mistakes

Credit report mistakes may involve bad data that makes a positive account look negative or a small error in an otherwise accurate negative entry. You can dispute either type of error with the Equifax, TransUnion and Experian credit bureaus, which forces them to remove the entire entry or try to verify it with the information source. The Divorcenet website advises that the bureaus often erase disputed material immediately if they are too busy to pursue the complaint, and often they never get a response to their validation requests, so your credit reports are improved through elimination of the negative data. This is a fast fix because the credit bureaus only get 30 days to conduct dispute investigations.