Self Help Credit Repair Tools

Your credit report is like a financial report card, according to Consumer Credit Counseling Services, a nonprofit debt management agency. It is a record of the way you handle loans, credit cards and other accounts. Creditors shy away from you if it shows you have poor financial management skills. You can repair your credit and mitigate past damage with several tools.

Credit Reports

You need a copy of your TransUnion, Equifax and Experian credit reports to find and remove harmful mistakes. The Fair Credit Reporting Act empowers you to dispute any item with an error, according to the Federal Trade Commission (FTC). This is important to credit repair because the bureaus must contact the creditors to validate the information. Many do not respond, so the negative item is completely wiped from your reports. The FTC advises that annualcreditreport.com gives free reports every 12 months to every consumer upon request. Use them to review your records and formulate as many disputes on bad items as possible.

Budget

Credit repair involves handling your finances responsibly and building up current positive records that eventually offset the old negative items. Credit score compiler FICO explains that you must get all your accounts current if you are behind in any payments and keep up on-time payments. You must also pay down high balances on cards that are close to the credit limit. Plan and maintain a budget that cuts out unnecessary expenses so you can focus on the important bills every month.

Bank Account

A checking or savings account helps you repair your credit in multiple ways. MSN Money financial columnist Liz Pulliam Weston explains that bank accounts look good on credit reports. You can pay bills electronically with them, which reduces the chance of a payment arriving late or getting lost. You won't forget to send it because you can schedule it to go out automatically every month on the specified day. You also can show fiscal responsibility by not bouncing checks.

Secured Credit Card

A secured credit card is a good credit repair tool if your other accounts were written off by creditors or wiped away in a bankruptcy. It lets you rebuild a positive credit history without having to qualify for conventional credit. Pulliam Weston advises that you guarantee the account with a deposit of at least $200 to $500. The bank extends a credit limit equal to the deposit and reports the credit line, purchases and payments to the credit bureaus.