How to Restore My Credit Report

There are five factors that determine a consumer's credit score: length of credit history, payment history, amounts owed on credit lines, types of credit accounts and new account openings. Of these five factors, when attempting to restore a credit report, a consumer should focus on amortizing credit balances, cease opening new accounts, be prompt with revolving payments, and dispute any inaccuracies being reported.

Instructions

1

Order a copy of your credit report from each of the three credit reporting agencies: Equifax, Trans Union, and Experian. Under federal law, each credit consumer is allowed to order a free copy of his credit report once a year.You do not need to order each report at the same time.

Review your credit report from each credit bureau for inaccuracies. Dispute any inaccuracies with the credit bureau(s) directly. Under law, credit agencies must remove any entry that cannot be verified.

2

Pay down the balance on credit accounts. Begin by listing all credit accounts from smallest to largest balance. Concentrate on paying the account with the smallest balance until that balance is fully amortized.

For accounts that have large balances (over $10,000), paying down the balance until it is below 25 percent of the original amount will reduce your debt-to-income ratio. This is particularly true of student loans and automobile loans.

3

Do not open new lines of credit. Opening new lines of credit automatically decreases your credit score because you are liable for a new debt. While a consumer may not actually spend up to the maximum credit limit, the unused credit amount is now potential debt; this is considered a negative factor when attempting to secure a loan.