Easy Ways to Repair Credit

Applying for credit and being denied by a lender often signals a weak credit score. Your credit score says a lot about your ability to manage debt and credit wisely, and lenders use the information in your credit report to determine whether you're eligible for loans, credit cards and other lines of credit. Fortunately, bad credit is fixable and you can repair credit without professional help.

Build a Good Payment History

Paying bills on time every month is one method of repairing a poor credit history. Lenders and creditors extend credit with the hopes that you'll repay the debt. People who fulfill their end of the agreement receive positive remarks on their credit report from lenders and a higher credit rating. Future lenders reviewing your credit will take note of your good payment record and readily extend a line of credit.

Pay Off Debts

Carrying a balance on your credit card doesn't destroy your credit rating. On the other hand, maxing out your credit cards and carrying high balances from month to month does have a negative impact on credit scoring. Paying off new charges with the arrival of each new statement is key to avoiding debt and keeping a good credit rating. Aim to keep credit card balances below 30 percent of your credit limit.

Fix Negative Entries

The majority of creditors regularly report to the bureaus, and if you have late payments or collection accounts, this information will appear on your credit report and lower your credit rating. Repairing credit involves reversing bad habits and working with lenders to remove negative information from your report. Rather than send a payment late or skip the payment altogether, speak with your creditor to arrange a different due date or ask to skip your payment for the month. What's more, if you have collections or judgments, make efforts to pay off these debts. In return, the creditor may delete the negative notation from your credit report.

Fix Mistakes

Never assume that the information in your credit report is entirely accurate. Mistakes are common, and another person's negative information can surface on your personal report. The best way to avoid credit reporting mistakes is to check your report at least once a year. Annual Credit Reports gives every consumer a free copy of their report once a year, along with contact information for creditors and the bureaus so you can dispute errors or mistakes.