How to Clean Up Your Credit History

Your credit score is a very important number. Banks use it to determine whether or not they will give you a car loan or a mortgage, it is a factor in determining your interest rate on loans and credit cards, and employers can even check it before they offer you a job. Get a handle on your debt and clean up your report.

Instructions

1

Obtain your credit report. You are entitled to a free credit report once per year. You need to see your report from all three credit bureaus: Equifax, Experian and TransUnion. Each report may differ in what they report. You can get all three reports through Annualcreditreport.com

2

Check your credit report for errors. Make sure that all information, such as the name of the creditor, the balance on the account, and the status of your account (whether or not you are making timely payments), are correct. Incorrect information can be an indication of identity theft, and may even hurt your score. Contact each of the reporting bureaus in writing to request that they remove the incorrect information. Supply a copy of your report showing the error. The reporting bureaus must correct the mistake within 30 days of receiving your request.

3

Take steps to improve your credit score. Be sure to make all payments on time. Try to lower your debt-to-credit ratio: the higher your balances are, the less credit you have available. Rectify this by paying down your balances. Remember that closing an account that you have paid off does not take it off of your credit report, it will increase your debt-to-credit ratio, and it can even hurt your credit if you had a long history with that creditor.

4

Seek help if you need it. Meet with a credit counselor who can help you design a payment plan. Seek a credit counselor through a nonprofit organization. Contact creditors and negotiate a payment plan if you are unable to make minimum payments