How to Fix a Poor Credit Rating

Fixing a poor credit rating is a top concern for people who want to qualify for a mortgage loan. However, the desire to purchase a home shouldn't be the only reason to improve a bad credit score. A good rating (700 or higher) proves that's you're capable of managing your finances and debts. Lenders and credit card companies reviewing your application will take note of your level of responsibility and offer the best finance deals.

Instructions

1

Reduce the balance on your credit cards. Write checks or make online payments for more than the asking minimum payment on credit cards. Paying a higher amount helps knock down the new interest charges and principal balance. Use money from savings, employment bonuses or tax returns to help eliminate debt.

2

Avoid late payments to help improve a poor rating. Begin raising a poor credit score with on-time monthly payments for vehicle loans, student loans, mortgages and credit cards. Delinquent or late payments hurt your rating. Record due dates to avoid missing a payment.

3

Get an annual credit report and review for accuracy. Monitor your personal credit report and dispute errors that can reduce your credit rating such as the reporting of wrong account information. Yearly reports are available free from Annual Credit Report. Order and view reports via the Internet.

4

Pay off judgments, collection accounts and other delinquencies. Settle past due or old accounts by contacting these creditors and making plans to pay off the balances. Request removal of this negative information from your personal report upon satisfying the debt.

5

Rebuild credit with a secured credit card after a bankruptcy. Don't live with a poor credit rating after a bankruptcy. Contact your local bank and apply for a secured credit card to begin re-establishing your credit history. Security deposits and setup fees are typical with secured accounts.