Effective Credit Restoration

Cleaning up your credit history and restoring your score is the best way to ensure that you're able to receive a mortgage loan approval when you're ready to buy a house. Credit scoring is a major factor in financing a home or acquiring other types of loans. But with effort, you can restore your credit and maintain a high rating.

Prove Creditworthiness

Get a loan, and then pay it off completely to show creditors and lenders that you're responsible enough to handle credit accounts. A loan approval alone doesn't improve credit. But by paying off the account completely, the lender issuing the loan will update your credit file and report the account as satisfied or paid. This positive remark adds points to your credit score, and other lenders reviewing your credit file will take this information into account and possibly extend additional lines of credit. Look into smaller installment or personal loans with your bank. Have collateral to secure the funds and increase approval odds.

Due Dates

Along with paying off balances completely to help restore your credit, you've got to pay creditors by your due date. Missing a due date or deciding to skip a payment because you don't have the cash drops your credit score. And if you plan on applying for loans in the near future, a late payment on your record can negatively impact a creditor or lender's decision. Plan to pay well before your due dates, and don't be afraid to contact lenders if unable to make a payment. Ask for an extension or a skip-payment option.

Collection Accounts and Old Debts

Cleaning up and restoring your credit involves more than simply maintaining your active or existing accounts. Old delinquent accounts on your credit file can prevent your credit score from increasing. Addressing these older accounts and working with your creditors to settle the debt or pay off the debts in full helps repair a bad credit history. Taking responsibility for an old debt doesn't automatically remove the remark from your report. But if you ask kindly, creditors may update your report and delete this information to help boost your score.

Credit Report Accuracy

Creditors should update your credit file after you've paid off a debt. But sometimes, creditors falls behind and they don't send regular updates to the bureaus. Irregular updates and other reporting mistakes can bring down your score. Monitor reports yourself and get a copy of your free reports from Annual Credit Report.com each year.

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Credit History Repair Services

When you have less than great credit, you may feel tempted to hire a company that offers to repair your credit history for a fee. Some of these firms even claim they can remove bankruptcies from your credit history. While some credit repair companies offer a legitimate service, others are out to squeeze fees out of your wallet. You can choose to repair a credit history yourself, but a debt repair specialist may save you time and money.

What They Do

Credit history repair services that abide by the law can only perform services that consumers can do themselves for free, according to the Federal Trade Commission. This is usually limited to disputing errors on a report and filling out the necessary paperwork, such as letters to the credit bureaus. The only other legal service they can provide is to offer advice, such as suggesting the right mix of loans.

What They Should Not Offer

No credit history repair service should offer a 100 percent guarantee to remove any and all negative items on your report. If you file for bankruptcy, for example, you must wait 10 years for this to fall off your report -- there are no tricks to removing a bankruptcy before the 10-year limit. A common fraudulent tactic is to advise the consumer to use a fake Social Security number. Suggesting or pursuing illegal tactics could land you or the credit repair service in jail.

Benefits

Even though credit repair services offer to perform actions you can do for free, you might benefit from this service if you have several errors on your report. It takes the typical consumer four hours to dispute a mistake on their report, according to Bankrate. Credit repair companies could add an air of professionalism to your dispute and eliminate the stress of fighting the credit bureaus.

Tips

If you decide to go with a credit repair company, do not hire a company that demands payment upfront. The FTC declared upfront payments to credit services illegal in 2008. Nonprofit credit counselors, such as those affiliated with the Consumer Credit Counseling Service, will help you clean up a credit report for free.

Also, be aware that you can add a personal statement to any negative item, which the lenders might weigh in any credit application.

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How to Check Your Credit Rating in Ireland

In Ireland, all lenders make decisions about your suitability for credit by checking your credit rating, and most lenders use ICB (Irish Credit Bureau). Its the central agency that retains individual details for existing and paid-off credit. Under the Data Protection Act 1988, as amended by the Data Protection (Amendment) Act 2003, you are entitled to get a copy of any information stored by ICB. Its important to regularly assess your credit rating. Check for errors and look for ways to improve your rating. Apply online or by mail, or call ICB. Reports cost EUR 6.00.

Instructions

1

Apply online to check your credit rating. Its simple and fast. Your application will be processed once the online application is submitted to ICB. Go to the ICB website (see Resources). Complete the application form accurately. Supply previous addresses. Tick the box to accept the terms and conditions. Click Payment Details. Provide your credit or debit card details. Click Confirmation. Check your details carefully. Errors will delay the application process. Click Finish. Take a note of your reference number. You will need this should you have to contact the bureau. Your report will be mailed to you in about four days.

2

Apply by mail to check your credit rating. Go to the ICB website to download an application form (see Resources). Click Download. Print the application form. Complete and sign the application form. Enclose a bank draft or postal order to the value of EUR 6.00. Mail to: ICB, ICB House, Newstead, Clonskeagh Road, Dublin 14, Ireland. Your report will be mailed to you about four days after ICB receives your application form.

3

Call ICB at 00-353-1-2600388 to get an application form mailed to you. Complete and sign the application form. Enclose a postal order or bank draft for EUR 6.00 and mail to: ICB, ICB House, Newstead, Clonskeagh Road, Dublin 14, Ireland. It takes about four days to get your report once ICB receives it.

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How Does Foreclosure Defense Affect a Credit Score?

Dispute

When you have a foreclosure on your credit report, it brings down your credit score. You may feel that the foreclosure information is incorrect or unverifiable in some way. For example, your lender might have gone out of business or merged with another company. This may lead you to defend yourself by disputing the information or demanding that the credit bureaus verify it with the new company.

If the dispute is resolved in your favor, the information must be removed and your credit score will go up. The first step in your defense is to get a copy of your credit report from Experian, Transunion and Equifax. You are entitled to one free copy from each of them on a yearly basis. Verify that the foreclosure is showing up on your reports. If it is, file a dispute with the credit bureaus.

Follow-Up

You will need to follow up on your disputes to see how your foreclosure defense is affecting your credit score. The credit bureau must investigate your disputes and seek to verify the foreclosure information. If it is not able to do so, it must remove the information from your credit reports. This will have a very positive effect on your credit score.

You should receive a letter detailing the outcome of the dispute. If you don't get one within 60 days, request new copies of your credit reports to see if the foreclose information is still there. If it is, your credit score will be negatively affected. Follow up with the bureaus by asking for written notification of the dispute outcomes.

Consumer Statement

If the credit bureaus are able to verify the foreclosure information, it will continue to bring your credit score down. You have one more defense option that will not directly bring your credit score up, but it might influence lenders in a positive way. You can add a consumer statement to your credit reports stating the reasons for the foreclosure and defending yourself by explaining any extenuating circumstances.

If you believe there is incorrect information and the credit bureaus will not remove it, you can also put that in the statement. Lenders will see this information when they request a copy of your credit report, and they can take it into consideration when they make a decision.

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What Constitutes a Perfect Credit Score?

A person's credit score is a measurement of his ability to pay off loans that he takes out. A person with a higher credit score is considered more creditworthy by credit rating bureaus than a person who the bureaus give a lower score. Having a higher score will qualify an individual for lower rates on interest on loans from most lenders. A perfect credit score is not necessary to receive the benefits of good credit.

Credit Scores

Credit scores are determined by credit reporting bureaus using a formula pioneered by the Fair Isaac Corporation. This formula uses information from the person's credit report to assign individuals a numerical score that expresses the likelihood that they will pay back a debt. Information taken into account includes payment history, length of credit history and amount of debt in relation to credit available. The scale ranges from 300 to 850.

Highest Credit Score Possible

A score of 850 is perfect credit -- the highest score possible. This indicates that, statistically, a person would be almost certain to pay back any loan issued them. This score could be attained through years of taking out and paying back loans on time, as well as keeping the balances on a credit card low. However, according to Bankrate.com, a score of 850 is exceedingly rare.

Highest Ranking

A score of between 775 and 800 will qualify a person for the very lowest interest rates on a loan that are offered to consumers. The person will be receiving, essentially, the exact same benefits as having a score of 850. A score lower than 775, however, might cause the person to pay a slightly higher rate of interest on his loans.

Considerations

It is unnecessarily and unrealistic to attempt to attain an 850 score, as a perfect score confers no additional benefits to the individual that a score of 775 or 800 -- the exact rating for a top-flight score is a matter of conjecture among credit experts -- will not already provide them. So, in this sense, a score of above approximately 800 could be considered, for all intents and purposes, perfect.

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How to Fix Credit Debt

You should seek help if you feel overwhelmed by excessive debt. Illness or long-term unemployment may have caused you to fall behind on your payments, and your problems may have escalated so much that your paycheck barely covers the minimum payments. Fortunately, there are several options for getting back on track, with help possibly just a phone call away. The Federal Trade Commission recommends that you seek impartial counseling help and stay away from any companies offering to charge you a fee for a quick fix to your debt problems.

Instructions

1

Get a copy of your credit report. Visit the website Annual Credit Report to order. Click on "Request Report" on the homepage, or call 877-322-8228. The three nationwide credit bureaus--TransUnion, Equifax and Experian--created the website to make free reports available as required by federal law. Your credit report will provide a thorough overview of your debt situation, including balances, and notations about accounts that are delinquent or have been sent to collection agencies. Having the information readily available will be helpful as you craft a plan.

2

Fix errors on your credit reports by writing letters to the credit bureaus, or challenge the entries online. You may have already paid off an account that is still showing delinquent or someone else's credit card account may be appearing on your file. Challenge the information online by visiting the website for the credit bureau and finding the "Disputes" menu tab or a similar heading. Click on that to enter your complaint.

Equifax
P.O. Box 740241
Atlanta, GA 30374-0241
877-576-5734
equifax.com

Experian
P.O. Box 2104
Allen, TX 75013
888-397-3742
experian.com

TransUnion
P.O. Box 1000
Chester, PA 19022
800-680-7289
transunion.com

3

Seek advice from a nonprofit credit counselor--even if you really feel that you would rather handle your problems alone. Advice from the counselors is confidential, and most services are free. A good place to start is with Consumer Credit Counseling Service, which has agencies around the country. The counselors can discuss various options for fixing your debt problems, including debt management and hardship plans. With debt management you make one monthly payment to the counseling agency, which in turn pays all your creditors. The agency negotiates with your lenders to lower interest rates and even reduce some of your balances by reversing some finance charges and fees. You in turn must agree to stay in the program for about four years and not seek or use credit during that time. The counselors can also help negotiate so-called hardship plans that can dramatically lower your individual monthly payments for up to a year while you get back on your feet. Find CCCS agencies by looking in your telephone directory or seek referrals for other nonprofit credit counselors from community organizations such as the Red Cross, Salvation Army or Urban League.

4

Fix your credit yourself by focusing on all outstanding debt. Make payments to bring all delinquent accounts current--or pay them in full. You can also contact creditors to ask for debt settlement agreements. Debt settlement is common for accounts that are four to six months behind or have been sold to debt collectors. The New York Times reports banks and other creditors will often settle the accounts for as little as 20 percent of the balance--though most settlements are for about half the balance. Call or write your creditors for debt settlement agreements. Ask them how much they would be willing to settle for. Then continue the negotiations until you have a deal.

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How Does Credit Card Ratings Work?

What Are Credit Card Ratings?

Several companies have sprung up in the last decade that compare credit cards, rate them and then report their information to the public. A consumer advocacy group started researching credit cards in 1998, because of the rise in credit card debt. Now there are many companies who rate credit cards, however if you are looking for one, make sure they are independent of any banks that issue credit cards. After the many components that make up the credit card and the bank that is issuing them are compared, the rating company gives it a rating. The companies use different systems, some much more comprehensive than others. Most commonly the system used to rate the cards are with stars. The more stars a credit card gets, the higher the rating.

What is Compared?

Criteria used in rating credit cards vary among the companies. All of them will compare the similar cards, such as reward cards to other reward cards or airline cards to airline cards. Other popular criteria are annual fee and interest rate. They will use reviews from other independent sources and from the cardholders themselves. Some even go so far as to call the issuing company and ask questions as if they were a customer to review their customer service. Then they are broken down into categories and compared again. Some of the categories are Business Credit Cards, Student Credit Cards, Low Interest and Bad Credit Credit Cards. After all the data is entered, the cards are compared and the results are published so the consumer can just look in one place to get the best credit card for them.

Other Helpful Information

All of these companies recommend that you know your credit score going in. This way you will not apply for a card with a good interest rate, only to find out your score doesn't meet their criteria and you end up with a higher rate. Most of the rating companies also have other helpful information, such as how to raise your credit score and credit counseling services. Lately, there has been more and more information on what to do if your identity has been stolen. And most offer credit card education. These companies have become an important tool in today's confusing credit card bombardment. They have a wealth of information to use and it's worth reading it, even if you're not in the market for a credit card right now.

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How to Remove Paid Debts From My Credit Report

It can be difficult enough to achieve or maintain a high credit score without inaccurate items pulling the number down. If you have a debt on your credit report that is inaccurate, you can file a dispute with both the creditor and the credit-reporting companies. There is no guarantee the debt will be removed; you will have to prove it inaccurate. However, if you are unsuccessful, you can tell the reporting company to keep your dispute on file and include it in your future reports.

Instructions

1

Acquire all of your credit reports from the three major consumer reporting companies. These are Equifax, Experian and TransUnion. By checking all three of these reports, you will know if you need to remove the debt from just one report or all of them. The Federal Trade Commission says you are entitled to a free credit report from these companies once a year. To order your report, go to annualcreditreport.com.

2

Send a written letter, not an email, to each consumer-reporting agency that has listed the debt you are disputing. Inform them of the debt you are disputing by enclosing a copy of the credit report with the disputed item circled. Enclose copies of all documents, such as payment records or court documents, to support your claim. Only send copies of documents; keep the originals.

3

Make a copy of your letter before you mail the letter. Mail the letter by certified mail and request a return receipt. Keep this documentation to prove the credit agency received your letter. The Federal Trade Commission requires these agencies to investigate and respond to your dispute letter within 30 days.

4

Send a second dispute letter to the creditor of the disputed debt. This letter should be similar to the first. It should include copies of all documentation to support your claim. The creditor is legally required to investigate your claim, and, if the evidence supports your claim, to notify all three nationwide reporting companies that the debt is invalid.

5

Ask the reporting company for the new corrected credit report if your disputed debt is proven invalid. The company is legally required to provide you with the written results of the investigation as well as the corrected credit report.

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How to Understand an Equifax Credit Report

You've taken the first step in becoming financially responsible. You got your Equifax credit report. Regular credit report check-ups are important to make sure you aren't forgetting any debt or that no one is fraudulently using your identity. But a credit report does you no good if you don't know how to read it. Fortunately, an Equifax credit report labels most sections clearly, so understanding your report should be a snap.

Instructions

1

Review your personal information. This should be the first section on your Equifax credit report. This will list the most recent contact information that the credit reporting company has. If there's any incorrect or missing information, report this to Equifax.

2

Review the accounts section. This is the second section on your Equifax report. These will be separated by type: mortgage, installment, revolving and other. The balance will show how much you have loaned to you; available will show how much credit you have left to use; credit limit shows how much credit you have access to; and the debt-to-credit ratio shows how much you have out compared to how much you have available. The report then lists how much your monthly payment is, followed by the number of accounts you have.

3

Read your tradelines. These are the list of companies that you have accounts with. Equifax will separate your positive accounts (Accounts in Good Standing) from your negative accounts (Potentially Negative Information).

4

Review the positive accounts first. Positive accounts may still have negative information from the past. Codes like R2 mean that you have been late on a payment. Some third-party groups that distribute the credit report may use words like OK to imply that your payment was on time. If you see something like 30 or 90 in red, this means you were 30 or 90 days late on your payment.

5

Look over the negative accounts, which should be separated by public records, negative accounts and collections. From here, they will be separated by whether the account is opened or closed.

6

Check that each negative tradeline includes an account name, account number, date opened, a balance, a date reported, the past due amount, the account status and the credit limit. If it does not include all of this information, dispute it with Equifax, and they may remove the account from your report.

7

Check for anything marked charged off, bad debt, or placed for collections. This means that the account is over 180 days past due and was sold to a collection agency.

8

Review your inquiries. This should be the final section on your credit report. Inquiries are a list of people who have viewed your credit report or to received your credit score. When you apply for a line of credit, the company you applied through will usually show up here.

9

Review the section of voluntary inquiries. These are inquiries that you authorized and that may affect your credit. If you did not authorize any of these, contact Equifax.

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How to Get Experian FICO Score

Before early 2009, consumers were able to get FICO scores calculated from all three of their credit reports---Equifax, Experian and TransUnion. As of February 14, 2009, Experian has cut off the consumer's ability to see their Experian FICO score, but is still allowing lenders to use this score to make credit decisions, according to the L.A. Times and Money Blue Book. This can be detrimental for consumers since not knowing this third score can bring about a surprise denial, if your other two scores are decent.

Instructions

1

Apply for credit with a mortgage lender. When you apply for this type of credit, the broker or loan officer sitting in front of you usually looks at all three of your scores immediately.

2

Talk to the broker or loan officer and ask to see your score. According to Money Blue Book, this type of lender is usually willing to share this information with you if request and may even give you tips on how to raise it to get the interest rate or amount that you need.

3

Repeat this process each time you need to see your Experian score.

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Why Is My Credit Score Low When I Have Great Credit?

Your credit rating is one of your most important financial assets -- or liabilities. Credit scores affect your ability to obtain a mortgage, open a credit card account and even get a job. If you have been paying your bills on time, but your credit score is low, it's no small matter. You need to find out why and take corrective action.

Description

Your credit score is a number generated by a computer program that summarizes the risk you present as a borrower. That is, it tells a potential lender how much risk he takes by extending you credit. SmartMoney.com points out that the average American has a credit score of around 725 out of a possible 850 on the FICO scoring system, the most widely used credit score. Anything over 700 is good, while a score under 620 is considered subprime, or poor. The key thing to understand is that your credit score is calculated based on the information on your credit report. If your credit score is too low, the problem will be information on your credit report.

Check Your Record

To discover why your credit score is low, you need an up-to-date copy of your credit report from at least one of the major credit reporting agencies --- Experian, TransUnion and Equifax. Under the Fair Credit Reporting Act, you are entitled to a free copy of your report each year from each company. Although you can purchase copies of your credit report from commercial sources, the free reports are available only from the Federal Trade Commission's authorized agent, AnnualCreditReport.com.

Correcting Problems

When you review your credit report, look for outdated or incorrect information. If you find items you think are in error, contact the credit reporting agency and initiate a dispute to have the problem corrected. You can usually do this online at the websites of the credit reporting agencies. Look also for credit accounts you don't recognize or other evidence of possible identity theft. If you see something suspicious, you can file a complaint with the FTC, file a police report and inform the credit reporting agency.

Improving Credit

Sometimes people think they are doing what they need to do to maintain a good credit score, but that's not always the case. You can trip yourself up even if you pay all of your bills on time. If you have recently applied for several new credit accounts or closed some accounts, this will lower your credit rating. The good news here is that this information stays on your report for only a short time and then is dropped. Another frequent problem is excessive debt. In particular, having a lot of unsecured debt, like "maxed out" credit cards, will hurt your credit score. Paying down these debts will improve your credit score.

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Will Paying Off $75k in Credit Card Debt Raise My Credit Score?

The average family had $8,000 in credit card in 2009, according to financial expert Dave Ramsey, so having $75,000 on credit cards can be very troubling. Tackling this debt is the wisest move you can make for your financial future, and it will help raise your credit score, too. However, to boost your score the most, be careful how you pay it off.

Identification

Paying off a $75,000 credit card balance almost assuredly raises your score, probably by dozens of points, because the FICO scoring system is most concerned with revolving credit card debt because it is unsecured. Your total balance accounts for 30 percent of your score and because you have far more revolving debt than the average person, that credit card debt has probably been dragging your score down.

Credit Utilization

Credit utilization refers to how much of your credit lines have already been used. Unless you have significant credit card debt left, bringing down your credit utilization to zero percent is a huge boost. The Fair Isaac Corporation found that a maxed out credit card damages a typical score by 10 to 30 points---more if the consumer has a better credit score. A high credit utilization ratio when you aggregate all of your accounts does even more damage.

Considerations

The credit bureaus ignore credit card utilization on accounts with no reported limit or use the highest balance on the history of the card. This usually occurs when you have a charge card, which bases your limit on spending habits. When this happens paying off the credit card debt will help your score, but won't improve your credit utilization as much as when the lender reports a limit. If you ran up all $75,000 on one card and the credit bureaus use this as the card limit, it will help you if you never come close to this amount again, because you will have a high limit, but a low balance in comparison.

Tip

Assuming you hold debt on other credit cards, you have a choice between saving the most money and boosting your credit score. The most efficient use of your money is to pay off the accounts with the highest interest rate first. To avoid a high credit utilization limit on any card, you should spread debt evenly across your accounts.

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Is There a Money Limit Credit Agencies Can Report to the Credit Bureau?

Credit bureaus such as TransUnion, Equifax and Experian report information provided to them by banks, credit unions, credit card companies and others. There are no limits on what the agencies can report, including the amounts that you owe certain creditors or the amount of available credit on your accounts. Creditors are responsible for the accuracy of the information.

Reporting

Creditors report to credit bureaus each month as they update account balances, credit lines, available credit and more. Other information is also noted, including late payments. Creditors will also inform the credit bureau if the account has been closed, charged off because of nonpayment or sent to a collections agency.

Credit Score

Information on the credit report is used to calculate your credit score. A credit score is a three-digit number ranging from 350 to 850 and is extremely important. A high credit score of 720 or greater usually results in the lowest interest rates available on loans and credit cards. Maintaining a high credit score can result in thousands of dollars in savings on finance charges over a lifetime. People with scores below 620 are considered high credit risks and pay considerably more in finance charges.

Debt Levels

Excessive debt may harm your credit score even if you pay your bills on time. People with credit scores in the 700s generally have low levels of revolving debt. Typically they pay off credit card debt each month to avoid finance charges and keep balances low.

Credit Repair

Improving poor credit scores requires patience. It is possible for almost anyone to build a 720 credit score, but that requires a rigid commitment to timely payments and keeping balances low over 12 to 36 months. All negative information on credit reports must be resolved as well, including judgments, chargeoffs and collection accounts. Most negative credit information is reported for seven years but automatically drops off after that. The key to credit rebuilding is to keep paying on time. Negative information eventually expires.

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How to File a Fraud Report

You must deal with fraud as soon as you catch it to minimize the damage to your credit score. Criminals will use your accounts and open new ones until they are stopped. A fraud report stops them and alerts creditors you are a victim. It is a critical step to reclaiming your identity and fixing your finances.

Instructions

1

Call one of three major credit bureaus and file a fraud alert on your credit report. You can notify Experian, Equifax or TransUnion. Each company maintains 24-hour fraud-alert phone numbers. You can get these phone numbers from the individual companies' Websites. The chosen bureau will ask for some personal information to confirm your identity and put an alert on your report for 90 days. The Federal Trade Commission (FTC) explains it will contact the other two bureaus so they can add alerts, too.

2

File a fraud complaint with the FTC. You can do this over the telephone or through the online complaint form on the FTC Website. Print out a copy to provide to law enforcement officials in the event you decided to file a police report. Also provide a copy to the credit bureaus and lenders as proof that you have been victimized.

3

Call your local police department and explain you need to make a police report because you are a fraud victim. The FTC advises talking to the state police if your local officers are reluctant to help you. You must get an official report because it is required to extend the initial fraud alerts you filed with the credit bureaus.

4

Contact Equifax, Experian and TransUnion and request a fraud alert extension. Your alert will remain in place for seven years if you provide a copy of your police report and FTC complaint. The warns lenders to take extra confirmation steps before extending any new credit in your name. The alert does not legally obligate them to do this, but most honor it because they do not want to open fraudulent accounts that will never be paid.

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Does It Hurt to Check Your Credit Score?

Checking your own credit report is recommended to help keep your credit score as healthy as possible. You need to protect yourself by looking for any errors that may negatively impact your score, because a lower score reduces your chances of obtaining new credit. Looking at your own credit report doesn't hurt your score, but you must ensure you're getting the report by the appropriate method.

Soft Inquiries

Credit report inquiries for employment, existing account reviews, credit card pre-approval offers or inquiries you make into your own account are considered soft inquiries. These inquiries do not have an effect on your credit rating, and lenders can't see them on your credit report. Therefore, checking your own credit report does not have a negative effect on your credit score.

Hard Inquiries

Inquiries made for an application for credit, such as those for credit cards, auto loans, mortgages and consolidation, are considered hard inquiries. Each hard inquiry has a small negative effect on your credit score. According to a Leslie McFadden article on the Bankrate website, these inquiries stay on your credit report for two years. However, FICO, which developed the model used for calculating credit scores, counts them only through the first year.

Annual Credit Report

You are entitled to a free copy of your credit report once each year through the Annual Credit Report website. Each of the three major credit bureaus -- TransUnion, Equifax and Experian -- provides a copy of your credit report through this website. The Federal Trade Commission warns against using other so-called "free" credit reporting websites, as they may later charge for their services. Bankrate warns that using a credit score reporting company that promises credit reports as a perk may damage your credit score as well.

Considerations

The Federal Trade Commission encourages individuals to look for errors on their credit reports and to notify both the reporting credit bureau and the creditor in writing of the discrepancy. Include any documentation you have to dispute the error. The consumer reporting company must investigate the items in question within 30 days unless the dispute is deemed frivolous.

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How to Fix Your Credit After Bankruptcy

It's possible to acquire A-plus credit after a bankruptcy discharge. To accomplish this, you need to build a new credit history and make every effort to avoid repeating past mistakes. With a new credit history, you are able to get a home loan and low rates on other types of financing. Sadly, some people don't learn from a bankruptcy. The key is learning how to properly manage your finances and debt.

Instructions

1

Make auto and student loan payments promptly, if applicable. Filing a bankruptcy doesn't mean you have to include all your debts in the proceeding. Some debtors keep their auto loans, and federal student loans aren't eligible for discharge. Help your credit after bankruptcy by paying these bills on time each month.

2

Put aside money for a security deposit. You likely won't qualify for an unsecured major credit card after bankruptcy. However, you'll need credit to rebuild credit. Prepare to apply for a secured credit card by setting aside $300 to $500.

3

Use your security deposit and apply for a secured credit card. Contact your personal bank or credit union and request an application for a secured credit card. Ask about start-up fees, monthly maintenance fees and annual fees.

4

Check into a small sub prime loan. Speak with a loan broker and inquire about subprime or bad-credit loans. These high-interest loans can help you build a good credit history after bankruptcy, provided you handle the account responsibly.

5

Strive to maintain a good payment record. Pay your creditors each month without delay to help your credit rating. Early payments eliminate accidental late arrivals.

6

Use credit cards with care. High debts prompt many to file bankruptcy. Limit your debt by using cash for most purchases. Only purchase with credit cards if you can realistically foresee paying off the account in full each month.

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How Long Is a Credit Report Valid?

Barring death, your credit history generally remains valid throughout your adult life. Your Social Security Number, name and other identifying information are linked to your credit report to assist lenders, insurance companies and even employers in verifying your financial responsibility. Under certain circumstances, you may have information removed, establish a new history or freeze your current credit report.

Timeframe

Your credit report changes as creditors add information or old data expires. Most negative information remains on your credit report for up to seven years. Credit inquiries by lenders --- other than those you have open accounts with --- appear on your credit report for two years. Bankruptcies may remain for up to 10 years and unpaid tax liens can stay on your credit history indefinitely. Positive information may remain on your report as long as the account is active or up to 10 years for closed accounts.

Scoring

The Fair Isaac Corporation (FICO) applies a score to your credit report based on lending history. Your payment history makes up the bulk of your score followed by your debt-to-credit ratio. The length of credit history, new credit and having a mix of credit types --- including revolving accounts, secured loans and mortgages --- also affect credit scores. While credit inquiries from potential lenders contribute to new credit scoring, inquiries by current lenders and checking your own credit report do not.

Options

Consumers may place a security freeze on their credit report preventing unauthorized access to the report by contacting credit-reporting agencies. Fees apply unless the request is due to identity theft or dispute investigations. Prohibiting access to your report may delay loan or credit approvals, and creditors with whom you have an existing open account with may still access the report. You may lift and reestablish the freeze at anytime for all or a select number of lenders.

Concerns

If negative information on your report is due to inaccurate information, you may have it removed by contacting the applicable credit-reporting agency. Report fraudulent activity such as identity theft to the Federal Trade Commission, lenders, credit reporting agencies, local authorities and the Social Security Administration. If a thief uses your Social Security Number to open credit in your name, you may apply for a new number and establish a new credit history under some circumstances. You cannot get a new Social Security Number to avoid debt or accurate negative credit reporting.

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Things to Do to Establish a Credit Score

Attempting to get a mortgage loan with no prior credit history can result in a denial. Some creditors and lenders need to assess your credit history before giving you financing. Therefore, you may need to establish a credit score in early adulthood so you can obtain a mortgage or other type of loan.

First-Time Auto Loan

Larger, established auto dealerships rarely issue loans to people looking to establish credit, unless they have a co-signer or a joint applicant. However, privately owned dealerships may approve you for a first-time auto loan, and that will help you establish a credit score. Fresh-start or no-credit-check dealers and auto lenders make a point of helping people with bad credit and no credit establish or improve their credit score. You'll pay higher finance fees for these loans, but it can establish a credit score and help you get better rates in the future.

Credit Card

Applying for and obtaining a credit card is another way to establish a credit score. Getting a credit card with no credit history is challenging, and you should choose creditors that work specifically with first-time credit users. Many banks offer student promotions, and they approve college students for small credit limits. Putting down a security deposit may help you get a secured credit card with your bank or credit union. Another option, if you know someone with a credit card, is to become an authorized user on that person's account and build your credit score that way.

Student Loans

The ability to attend college when funds are low is a benefit of federal student loans. Another benefit is the ability to obtain a student loan without a prior credit history or credit check. Applying for a loan immediately after high school helps you establish a credit history, and making timely payments on your student loan debt each month gradually increases your credit score.

Credit Patterns

Establishing a credit score isn't enough to have good credit. You need to make wise credit decisions to build a high rating. Benefits of a high credit rating include the ability to obtain a home loan with a low interest rate, low-rate financing on auto loans and, in some cases, low rates on insurance. Making debt payments on time and keeping credit card debt to a minimum help build your credit score.

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Credit Bureau Reporting for Delinquent Tenants

When tenants become delinquent, their record of payments can be reported to one or several credit reporting agencies. For a landlord to report you, your delinquency must have reached a certain level. This information can have a negative impact on your credit report.

Credit Reporting

When a landlord evicts you, the chances are that you have an unpaid balance. If you decide not to pay, the landlord will turn your outstanding balance over to a collection agency. The collection agency will report you as a charged-off account to a credit reporting agency. Charged-off accounts are accounts that the landlord has deemed to be uncollectible or has written off as a loss to the company.

Credit Reporting Agencies

A debt collector will report your information to a credit reporting agency. The three major reporting agencies are TransUnion, Equifax and Experian. Your damaging credit information could be reported to all three agencies or one or two of them. To get a free copy of your credit report from all three agencies, contact www.annualcreditreport.com. You may be able to view your report online or you can have copies mailed to your current address.

Credit Score

Charged-off accounts are reported on your credit file for a period of seven years. If you decide to pay off the account, it will show up on your credit file as a paid charged-off account. This information can lower your credit score. A credit score is used by lenders and those who extend credit to help determine who is likely to default on a loan. Credit scores range from 300 to 850. If your score is lowered substantially, you could be rejected for credit in the future or pay higher interest rates.

Negotiate

When the collection agency contacts you about payment, you may be able to negotiate the repayment of the debt, as well as your credit rating. Sometimes you are able to get the collection agency to agree to remove the damaging information from your credit file once you have paid the debt in full. The agency may or may not agree to negotiate with you. If it agrees to remove the information from your file, make sure you get the agreement in writing.

Dispute

If the damaging information does not drop off your credit file after seven years, you can send a letter of dispute to the credit reporting agency where the information appears. The credit reporting agency will contact the landlord to resolve the issue. The information will be taken off your credit report.

Leasing

Damaging information on your credit file will make it difficult to find a landlord willing to accept you as a tenant in the future.

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How to Reach a Live Person at Equifax

Equifax is one of the three major credit reporting agencies. It offers a credit monitoring service that allows you to take a look at your report any time you want and will update you when there's a change. After the trial period, there's a $15 recurring monthly charge for this service that's notoriously difficult to cancel. Use the correct phone number and prompt choices to get a live person on the phone to handle any credit issues you might have such as cancellation, credit inquiries, credit fraud or account freezing.

Instructions

1

Call (866) 640-2273 (the Equifax help line).

2

Press "1" at the prompt for English (press "2" if you'd like Spanish).

3

Press "5" to speak with a credit monitoring specialist.

4

Press "1" to speak with a credit monitoring specialist about your credit monitoring product.

5

Wait a few moments to be transferred to a live person. You'll now be able to fix any problems with your monitoring service. Once connected, you can be transferred to another department to answer any other unrelated questions.

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Can a Credit Card Being Canceled Due to Inactivity Hurt My Credit?

When it comes to credit, finding the right balance can be a challenge. You may think a keeping a credit card without a balance can help your credit score. But by not using your credit card, you risk having the card canceled due to inactivity, which can lower your credit score.

Losing an Old Account

If your credit card has been in your wallet for quite some time, chances are it has helped boost your credit score. Your credit score is partially determined by the length of time your accounts have been open. When your credit card is canceled, you lose the positive credit associated with the card.

Losing the Available Credit

Your credit score is also based on the available credit. Credit utilization is your balance to available credit ratio. If you have a credit card with no balance and a high credit limit, the available credit is increasing your total amount of credit. When the card is canceled, you lose the credit. If you have other credit cards carrying balances, you will need to pay down the debt to compensate for the credit loss.

Prevent Your Card from Being Closed

You can prevent your credit card from being closed due to inactivity by periodically using the card to make small purchases. If the card carries a high interest rate, pay the balance in full each month.

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Letter to Dispute Debt

Bankrate.com reports that statistics show 70 percent of all credit reports contain serious errors. These errors can lower your credit score and lead to denials, high interest rates and strict loan terms. Fortunately, the three credit bureaus -- Equifax, TransUnion and Experian -- must investigate any error you bring to their attention and either remove or correct inaccurate information. You can dispute these inaccuracies through dispute letters.

Disputing Errors

Under the Fair Credit Reporting Act, the credit bureaus must investigate any legitimate claim from a consumer. To initiate a dispute, you must contact the creditor bureau who reported the inaccurate information directly. You can do this by writing a dispute letter to the credit bureau. Once the credit bureau receives your dispute, they will investigate your claim. The credit bureau may contact the creditor to validate the information. If the creditor cannot validate the information, the credit bureau will correct or remove the listing and send you an updated copy of your credit report.

Writing a Dispute Letter

The dispute letter must contain a header including your name and contact information, as well as the name and contact information for the credit bureau. In the body of the letter, write as much detail as possible. Include why you feel the credit bureau listed inaccurate information using any examples you can provide. Attach a copy of your credit report with the error circled on the report. Include any documents you have to support your claim as well.

Handling Accurate Negative Information

The credit bureaus cannot remove accurate information from your credit report. Smaller negative information, such as a late payment on a credit card, will remain on your report for 7 years, while larger problems, such as bankruptcy, remain on your report for 10 years. While you cannot delete this information, you can counteract the negative effect by building a positive credit history. Paying your bills on time, keeping your balances low and only applying for new credit when you truly need it will add positive information to your credit report.

Tips

Under the Fair Credit Reporting Act, the credit bureaus must give you a free copy of your credit report once per year. You can order a copy from each credit bureau at once or space out the reports throughout the year. You can receive a copy of your credit report from Equifax, TransUnion or Experian through the Annual Credit Report website.

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How Long It Takes to Raise a Credit Score

Your credit score is a number between 300 and 850 that helps lenders decide how much of a credit risk you are. While some actions can raise your credit score in under a month, other steps may take a year or more to go into effect.

Options

Many different actions on your part can lead to an increase in your credit score. For example, having a good mix of types of credit, avoiding opening too many new credit accounts at once, making on-time payments, carrying low balances and managing credit for many years all contribute to raising a credit score.

Time Frame

A loan broker can help correct errors on your credit report through rapid re-scoring and increase your score within 72 hours. For another fast change, pay down credit card balances and see your score increase the next month after the credit card companies report the lower balances to the credit bureaus. Building a history of on-time payments will gradually increase your score over the next few years.

Significance

If you know you will be shopping for a loan within the next year or two, start getting ready now by pulling your credit report and working to improve any negative points you find. Increasing your credit score can save you thousands of dollars by getting a lower interest rate on your loan.

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How to Find an Apartment With No Credit Check

Finding an apartment is stressful enough without worrying about passing a credit check. There are many landlords that do not require a credit check before leasing an apartment. With a little searching, and a backup plan, you can easily find an apartment despite your bad credit score.

Instructions

1

Gather letters of recommendation from former or current landlords and employers. In lieu of a credit report, a letter of recommendation ensures a landlord that while you do not have an ideal credit score, you are able to retain a job and pay your rent on time.

2

Look for apartments in your local rental listings. These can be found in newspapers and various apartment locating websites such as apartmentfinder.com. There should be a phone number accompanying the listing so that you can call the landlord or building management company to set up a time to view the apartment.

3

Visit the apartments that interest you. If you decide there is an apartment you like, let the landlord know you are interested and she will let you know if a credit check is required to rent the apartment. Oftentimes for smaller apartment buildings, a credit check will not be required.

4

Let the landlord know that you are employed and have letters of recommendation available at her request.

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How to 2010 Credit Score Tips

Increase your credit score in 2010 with these tips that will help improve your finance.

Instructions

1

Become more determined to increase your credit score and credit standing.
The first step towards better credit is to be more responsible. Your attitude towards credit management will determine the altitude of your credit score.

2

Create fewer bills.
The economy is predicted to be slow in 2010 as fewer consumers will have jobs. In fact, this economy need for everyone to increase their spending and to exercise greater buying power. Just don't try to buy out the recession by yourself. Pay using cash or your debit card as often as possible. Doing so, will reduce your trailing debt and interest expense.

3

Pay more than the minimum payment.
Creditors extend terms that are calculated to do more harm to consumers than good. A typical purchase may result in paying over triple the original cost due to interest. Make 2010 the year that you send in more than the minimum payment.

4

Pay your bills sooner.
Don't try to time your grace period and juggle bills to make it before being late. Try to pay your bills based on your last statement. Look at your last statement for each bill to notice the statement date. As long as you have not increased your balance, you can still pay more than your last minimum payment.

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How do I Dispute a Negative Equifax Credit Report?

The information in your credit report should be up to date and accurate at all times. Incorrect credit information may lower your credit score, increase your interest rates and even cause denials of credit. The Fair Credit Reporting Act gives you the right to dispute inaccuracies in account balances, dates of last activity, credit amounts or even your previous addresses and names. The credit reporting agency must investigate your claim and either confirm or correct the information.

Instructions

1

Go to the Equifax website (see Resources). Scroll down to the "Correct Errors" section and click on "Start a New Dispute".

2

Fill out the required information such your name, address, Social Security number and date of birth. Type the code into the verification box at the bottom of the page and click "Submit".

3

Answer the identity-verification questions on the next pages. Questions include multiple-choice questions about creditor names, debt amounts and previous and current addresses. Click "Start New Dispute" once you finish answering the questions.

4

Navigate through your credit report by using the menu on the left side of the page. Click the "Dispute This Item" link and choose a reason for the dispute and any additional information about that specific item. Click "Add Dispute" and repeat this step until you've added all disputed items.

5

Click "Dispute Summary" and confirm your disputed items. Type your email address if you want notification about the status of your dispute by email. Click "Submit Dispute" to complete the process.

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Can a No-Limit Credit Card Affect My Credit Score?

Some credit card companies advertise that their cards have no spending limits. In these cases, the company might approve each purchase individually based on your credit score and borrowing history or have a more traditional credit limit but allow purchases above that limit at the company's discretion. Either way, the card can have some unusual effects on your credit score.

Credit Utilization Basics

The main difference between a no-limit credit card and a regular credit card with a spending limit is the way that it is factored into your credit utilization. Your credit utilization is the percent of your available credit that you are using at any given time, both on each individual card and overall. Find your utilization by dividing the credit card balance by the credit card limit. In general, the higher your credit utilization, the lower your score.

No-Limit Credit Utilization

No-limit credit cards will negatively affect your score if the issuer reports your current balance or your highest recent balance in place of your credit limit. For example, if the most you have ever charged on the card at once is $3,000, the issuer might report that as your credit limit. Therefore, if you charge $1,500 on the card one month, it will look like you are using 50 percent of your credit, even if the issuer would allow your balance to go up to $15,000. However, other issuers report no limit on the card or list the card as an open account, not a revolving one. In either of these situations, the credit score formula will completely ignore the card when calculating your credit utilization, so it will not have a positive or negative effect.

Checking the Effects

The only way to know how your card is affecting your credit score is to pull a copy of your credit report. You can get one from each of the three major reporting agencies for free each year through AnnualCreditReport.com. When you get the report, look at whether the account is listed as open or revolving. If it is open, your balance and limit do not affect your score. If it is revolving, look at the credit limit that your issuer reports. If your usual balance is below 30 percent of the limit, this should not hurt your score. However, if it is higher, the card is probably lowering your score.

Usual Credit Card Effects

In addition to the unusual circumstances surrounding a no-limit credit card, your use of the card affects your credit score in most of the ways that an ordinary credit card would. Your payment history on the no-limit card appears on your credit report, and missed payments hurt your score while consistent on-time payments help your score. Applying for a no-limit credit card will slightly hurt your score, just as applying for a regular card would. Lastly, having a no-limit credit card account go to a collections agency because you don't pay it will seriously hurt your credit score.

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Can I Get a New Credit ID File?

Bankruptcies can stay on your record for 10 years, so it may seem better to just start over than fix the problem. Some companies offer to segregate your bad files, but this practice is illegal.

Function

Unscrupulous credit repair companies might tell you how to get a Employer Identification Number from the IRS, according to the Federal Trade Commission. Because an EIN is the same length as a Social Security number, it can appear as a legitimate substitute.

The Reality

EINs are only supposed to be used by businesses who report financial data. Registering one is free. The credit repair company may simply steal another person's Social Security number, according to the FTC. Using either to obtain credit could result in fines or jail time, depending on the size of the line of credit.

Tip

A bankruptcy or other serious flag on your credit history does not mean it is impossible to get credit, according to the FTC. Lenders may start to offer credit again if you begin paying off your accounts on time.

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How to Get Safe Credit Checks

It is extremely important to stay up to date on your credit score, especially if you plan on taking out a large loan or mortgage within the forseeable future. Your credit score is going to help determine how much money you qualify for and how high the interest payments are going to be. However, it is important to protect your credit information, so when you perform a credit check you want the online site to be secure and safe.

Instructions

1

Launch your Internet browser and navigate to the site "AnnualCreditReport.com." This website is recommended by the Federal Trade Commission and is an extremely safe site to check your credit score on. Do not use one of the free credit score sites you see advertised on commercials because you have to sign up for a service with a monthly fee before you can look at your credit score.

2

Select the state you are currently residing in and click the "Request Report" button to the right.

3

Type in the required information, including your full name, birthday, Social Security number, address and a security code at the bottom of the page. The web page is protected and authenticated, so you do not need to worry about your Social Security information being stolen.

4

Click "Continue" and your credit report information is displayed. You may want to print off the content for your records. Do this by clicking "File" followed by "Print."

5

Log off of the site and close the web browser. This is especially important if you are using a public access computer, such as one at a school or library.

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Alternative Credit Services

Lenders and borrowers alike tend to focus on the FICO (Fair Isaac Corporation) score, but there are as many as 1,000 types of credit scores, according to Experian. It is possible to gain credit without the use of a traditional credit score, but it is far harder. It might just be best to start a credit history with the easiest card to acqure.

Are Alternative Services Worthwhile?

The problem with alternative credit-scoring services is that there is little guarantee that lenders will give weight to the score. One alternative service, Maxamum had only 800 lenders taking its credit score as of 2010, according to Payments Source. In 2010, standard practice for credit bureaus and creditors is to ignore nontraditional payments, such as utilities and rent checks. Utilities are not part of the traditional scoring model because utilities cannot report payment history themselves, making veracity of self-reported payments dubious at best.

Importance

The credit industry recognizes the importance of the potential profits from the 50 million people who do not have any credit history. The Fair Isaac Corporation, which also maintains the standard FICO model, has the FICO Expansion model, which includes data not used in the traditional formula, such as telephone records. As of 2010, 10 million consumers have been scored using the Expansion formula.

Misconception

You cannot use an alternative credit score in lieu of a your FICO score to escape negative information because of missed payments and other problems. Alternative scores are for people who choose not to use credit, but pay their bills on time. Also, consumers should watch out for credit-repair or credit-service scams. Some companies claim they can give you a new identity under which you can take out a loan -- this practice is illegal.

Tip

The biggest lenders, such as the federal Fannie Mae and Freddie Mac, are waiting to see how well alternative scores work, as of 2009. In the meantime, consumers without a credit history should consider a secured credit card. These are the easiest types of credit cards to get, but require a deposit equal to the credit limit. On the plus side, they report to the credit bureaus and banks often offer credit cards once you establish good history with your secured account.

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How to Begin a New Credit Record

Building credit is the first step to financial adulthood. Having good credit not only allows you the ability to get credit cards and borrow money, but a strong credit score will give you lower rates when buying a car, home or starting a business. Also, many employers require a credit check when applying for a job.

If you are just starting out, beginning a credit record may be overwhelming, but if you do it the right way from the outset, it will provide you with financial benefits for the rest of your life.

Instructions

Getting Credit

1

Even if you don't have any credit, check your credit report to make sure there aren't any discrepancies. You are legally entitled to a free credit report each year from the three major credit bureaus: Experian, Equifax and TransUnion.

If there is information on your credit report that is wrong, correct the situation by contacting the appropriate credit reporting agency and filing a dispute.

2

Open a savings account to give your loan or credit application a better chance of being approved. Lenders will see you as more financially stable, and the account gives you a way to begin to build a financial history.

3

Apply for a credit card with a local department store. Store cards are often easier to obtain than other credit cards.

4

Get a secured credit card. A secured credit card allows you to borrow against money you have already put up as a deposit. Financial institutions see this as much less risky.

5

Get a co-signer. By using a co-signer, you are piggy-backing on someone else's credit history. The co-signer agrees to pay back the loan if you don't.

Maintaining Your Credit

6

Understand your credit score. A credit score takes into account essentially two things: how much of your available credit you use and whether you pay your bills on time. A credit score ranges from 850 to 300. Anything above a 700 is considered a strong credit score, while below 600 is considered a risky credit score.

7

Shop around for the best rates. Different credit card companies offer different rates and terms on their credit cards and loans. Look for the lowest interest rate, highest rebate benefits and most flexible payment scheme. There are many financial companies that claim they have such programs in place, but you need to confirm. Check the background of your chosen lending company as well as its reputation.

8

Pay your bills on time. The willingness of lenders to extend credit is directly related to your payment history. If you are too busy or afraid you may forget to make a payment, have it automated. Most credit cards and lending companies allow you to pay your bills directly from your checking or savings account. If you fail to make just one payment, you are jeopardizing your credit score and your credit history.

9

Manage your credit. When working with revolving lines of credit such as credit cards, try never to have a balance that is more than 30 percent of the card's limit. Also, if you can, pay off your balance every month. This will limit your interest payments and keep your credit history active and healthy.

10

Keep track of your credit. Credit records don't stop at the time you receive your credit approval. This is just the beginning of building a good credit reputation. It is important to keep records of all your credit transactions and handle any problems as soon as they arise.

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Is It Illegal to Report a Co-Signer to the Credit Bureau in Colorado?

Being approached by a friend or family member asking you to co-sign for a loan is often a difficult situation. Co-signing for a loan in Colorado requires careful consideration to ensure that you are aware of the potential negative effects involved with co-signing for a debt, including whether Colorado allows the debt to be reported to the credit bureau.

What is Co-Signing?

When you co-sign, you allow a creditor to offer credit to someone else by using your good credit. A debtor who needs a co-signer cannot qualify for a loan on his own or may be required to pay a high interest rate. By using your credit, the debtor will qualify for a loan at rates based on your credit score. Your name is placed on the loan documents, and you will be required to sign loan documents.

Risks

Co-signing may help the debtor, but you are at significant financial risk whenever you co-sign. You are putting a portion of your financial history in the hands of the debtor. When co-signing, the debtor is responsible for paying the loan, but you are also, ultimately, responsible as well. Anytime the debtor fails to repay the debt, the creditor will look to you to make a payment. Not only can you be asked to make a payment if the debtor quits paying, but the entire debt will be your responsibility as well. Your credit can and will be damaged if you are unable or unwilling to repay the debt. In addition to your credit score being damaged, you can be sued for the debt.

Colorado and Federal Law

Both the Colorado Uniform Consumer Credit Code and the federal Fair Credit Reporting Act govern how creditors report accounts to credit bureaus. Neither the state of Colorado nor the FCRA prohibits creditors from reporting to a co-signer's credit report. When you agree to co-sign, you are taking financial responsibility for the loan and telling the lender that you agree to be responsible for the debt should the debtor fail to repay.

Avoiding Issues

You must be certain the person you are co-signing for has the ability to repay the debt, and you must feel confident that he will be reliable. Evaluating your financial situation is important as you must be able to make payments or repay the debt should the debtor fail. Contact the creditor to ensure that a system is set in place to contact you immediately if payments are missed. Failure to keep up on the payment status could harm you if the creditor reports missed payments that you were unaware of because the creditor contacted only the primary debtor. It is important to understand that Colorado does not require creditors to report the debt to the credit bureaus; however, most creditors do report the debt. By speaking to the lender, you can attempt to avoid any negative reporting to your credit report.

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What Is a Great Way to Rebuild My Credit?

If you have bad credit, fixing it should be a high priority. Your credit rating is used by landlords to determine whether you're a tenant they want, by creditors when deciding whether to extend a loan to you and even by employers who can withhold a job offer if your credit is bad. There are several steps you can take to rebuild your credit, including some great ways that you may want to explore.

New Credit Cards

If credit cards got you into trouble in the past, they can do so again. They also can be a great and quick way for you to reestablish credit and improve your credit score. Major card providers such as Visa, MasterCard, Discover and American Express may not want your business without charging steep fees and high interest rates, but some retail stores may be willing to extend credit to you. Issuers of store credit cards are more lenient, but if you can get such a card, use it sparingly and pay off your balance, your credit will improve, according to Bankrate.com.

Get in the Habit

One of the things that may have gotten you into credit trouble in the past, bad habits, can be corrected if you practice good habits. These bad habits might have included charging things you clearly could not afford, making minimum monthly payments, falling behind on payments, incurring late charges and fees, and defaulting on a loan. Buy what you really need, pay off your credit card on time and pay off your balances. These steps will help establish a proven track record of good credit practices, another way for you to rebuild your credit.

Review Your Credit

You should review your credit reports at least once annually. The three credit reporting bureaus are Equifax, Experian and Trans Union; they are required by federal law to supply one free copy of your credit report to you annually through a website set up for that purpose at AnnualCreditReport.com. Review your reports for accuracy. If inaccurate information is found on any report, your credit score could be low as a result. You may need to write to the company, explain the error and supply copies of supporting documentation. By law, the credit bureaus must investigate your claim and must, usually within 30 days, correct the mistake or automatically remove that information. You are entitled to obtain a copy of their findings and to receive a free copy of your updated credit report. Your credit scores are also available, but for a nominal fee.

Get More Credit

Once you establish a solid track record of rebuilding your credit, and your credit scores begin to improve, then you can begin to borrow for other purposes, including obtaining an installment loan for a new car. Those rates may be sky high, but you may be able to refinance for a lower rate later on. Liz Pulliam Weston, writing for MSN Money, advises loan shoppers to put down a large amount of money and to avoid loans with a big prepayment penalty.

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Does Putting Your Student Loan in Forbearance Hurt Your Credit Score?

Student loans have some of the highest default rates of any loan type, because of rising tuition costs. In 2007, for example, 6.9 percent of federally backed student loans were in default -- the highest since 1998, according to the Wall Street Journal. Forbearance is a temporary reduction in your monthly installment that can help you get back on track without damaging your credit.

Impact on Credit Score

Putting a student loan into forbearance will not hurt a credit score, because it is something the lender agrees to do for the borrower. As long as the borrower meets the conditions of the forbearance, such as paying interest on the principal, the lender will report the account as "paid as agreed" to the credit bureaus. This will generate positive payment history and boost a credit score.

Benefits

Asking a lender to put a student loan into forbearance will prevent defaulting on the loan in the short term if you are not already late on payments. More important than the few months of positive reporting data, you will not have negative marks from missing installment payments. In the meantime you can hopefully catch up on your bills, fix the issue causing you to need a forbearance or find new ways to earn money, or a combination of all three.

Time Frame

Borrowers with student loans should not use forbearance as a solution to any structural problems with their budgets or incomes. Lenders usually do not grant a forbearance lasting longer than a year. Also, during forbearance, the loan still incurs interest charges, and forbearance will lengthen the term of the loan or increase the monthly debt payment. You must prepare for one of these scenarios or you could miss payments once the forbearance ends, and your score might take a drop if default on the loan.

Tip

If you qualify for a forbearance, explore the option of a deferment. Deferment is like forbearance, but the lender puts off any payment indefinitely. To qualify, you usually have to be current on your payment plan and have some kind of hardship, such as losing a job or returning to school. In any case, you will almost assuredly have to pay back your loan at some point. Student loans are rarely discharged during bankruptcy, unless the borrower can prove they are an undue hardship, according to Nolo.

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