How to Fix Bad Credit for Free

The Federal Trade Commission states that firms bombard consumers with ads for paid credit repair services, but credit clean-up is free and can be done without any outside help. The Fair Credit Reporting Act allows you to dispute and request the removal of certain negative items. Additionally, you can pull up your credit rating by concentrating on certain financial management practices recommended by the FICO credit score company. Credit report disputes and a sound financial plan are all legal, effective and free strategies to fix bad credit.

Instructions

1

Find as many reasons as possible to dispute negative credit report entries. Negative items may be blatantly incorrect, or they may have small mistakes in things like payment dates, name spellings or account balances. You can check your TransUnion, Equifax and Experian credit reports once every 12 months for no free if you order them from annualcreditreport,com.

2

Write dispute letters to each of the three credit reporting agencies demanding an investigation of the mistakes. The FCRA gives the agencies 30 days to contact creditors for validation. The items have to be erased if they are not verified. The FTC recommends getting proof of the letter receipt dates by sending them through certified mail.

3

Catch up every delinquent account and make all future payments by the due dates. FICO, the biggest credit score company, explains that past-due payments and accounts that get turned over to collection agencies are very harmful to your credit rating. Set up electronic deductions, if possible, to avoid mail delays for your payments.

4

Pay as much money as possible every month on your highest revolving balances. Credit cards are revolving credit lines that hurt you if you run up your debt to the maximum limits. You will not make much progress by paying the minimum amount due each month, so add more regularly.

5

Leave credit card accounts open, even if you pay them off. FICO looks favorably on long-term accounts.