Clean up Bad Credit for Free

Desiring an impeccable credit history and a high credit score is only natural. People with the best scores receive the best rates on home loans and automobile loans. And having a good credit score can improve your odds of getting certain types of jobs. There are plenty ways to clean up bad credit. And yes, you can contact a credit repair company for help. But why spend money when you can repair your credit for free?

Get Your Credit Report

Before you can take steps to clean up your bad credit, you need to obtain a copy of your personal report and see the damage. Credit reports detail your credit history. If you have a past bankruptcy, foreclosure, repossession, collection accounts or judgments, creditors report this information to the bureaus, and it's visible to anyone who checks your credit.

Once you have your credit report and score in-hand, you can begin cleaning up your history. Paying off collection accounts and judgments can add points to your credit score. And if your report reveals inaccurate information or unknown accounts, disputing these errors and getting these remarks removed can also improve your score.

Improve Your Credit Habits

Maintaining a satisfactory credit score can be as easy as paying your creditors on time. Timely payments play a major role in credit scoring. Late payments damage your rating, and it's not always easy to recoup those lost points. What's more, other lenders may note your bad payment history and deny your request for credit.

Resolve to improve your credit habits and use credit responsibly. This often calls for self-control and organization. Write your due dates down on a note pad or calender, or sign up for automatic bill pay through your bank to prevent future late payments. And if you don't have money for an item, instead of whimsically pulling out your credit card, wait until you have the available cash.

Pay Down Debts

A high debt-to-income ratio is equally damaging. And owing several thousands of dollars on a credit card can result in paying hundreds of dollars each month in payments. This can impact your ability to qualify for a mortgage, vehicle loan or other type of financing. But you can rectify the matter by developing a debt elimination plan.

Depending on your amount of debt, it can take several months or years to pay down the balance. Cut out extra spending and unnecessary purchases and use this money to reduce your credit card balances. Get a low-interest home equity loan, or transfer your high-interest balances to a low-interest credit card. This maneuver can result in lower minimum payments, and by paying double or triple the minimum, you can get out of debt faster.