How to Fix Destroyed Credit

Banks, lenders and some insurance companies use credit scores and credit history when reviewing applications. The lower your score, the harder it becomes to acquiring financing and low insurance premiums. But regardless of what happened in the past, you can fix a heavily damaged credit history.

Instructions

1

Review credit damage. Order a personal credit report from each of the three reporting agencies via Annual Credit Report. This site provides free reports, and examining your personal credit history helps you determine areas that need improvement.

2

Dispute incorrect information. Even with a legitimate bad credit history, some entries on your credit file may appear in error. Circle inaccuracies on your report and then notify creditors or lenders of their mistakes. Request a quick update of your file to help improve your credit history.

3

Pay bills on time. Reverse a terrible payment history and improve your FICO credit score. Send payments by the due date and your credit health will improve gradually. Consistently good payment habits results in creditors and lenders reporting that accounts are "paid as agreed."

4

Pay down maxed out credit cards. Owing several thousands of dollars, exceeding credit limits and maxing out credit cards can devastate your credit. Pay off these balance to recover, or at least pay down balances to below 30 percent of the credit limit, according to MSN Money.

5

Start over and practice better credit habits. A bankruptcy is a chance to start over and rebuild your credit. Make wiser choice after acquiring a new credit account following a bankruptcy. Open a savings account with a bank and get a secured credit card. Pay off the card in full each month and make payments several days before the due date to avoid a late payment.