How to Clean Up, Restore & Repair Credit

Disregarding your credit file and history can have lasting consequences. Try to maintain a satisfactory relationship with your creditors: they have the power to lower your interest rate and submit positive remarks to the credit bureaus. In return, future lenders are more apt to approve your applications for credit based on your prior history. But even if you currently have poor credit, it's possible to clean, repair and restore your rating.

Instructions

1

Take an active approach. Wrong information can find its way onto your credit report. Head off credit problems by closely monitoring your personal report. Order a copy once a year and dispute mistakes.

2

Control spending. Using credit cards excessively increases your balances and lowers your credit rating. Put your cards away (use for emergencies) and pay with cash.

3

Create a strategy to reduce debt. Calculate your outstanding credit card balances and devise a plan to eliminate debt. Borrow from your personal savings or sacrifice extras such as eating out and vacations in order to become debt-free.

4

Limit credit application. Only apply for new lines of credit when necessary. Excessive inquiries or credit applications have a damaging effect on credit ratings.

5

Rebuild after a credit blunder. Bankruptcies don't last forever. Begin restoring your credit immediately after a discharge by applying for a secured credit card and continuing to pay debts that weren't included in the bankruptcy.

6

Make sure creditors receive payments on time. Don't postpone paying credit card statements and other loans. Schedule payments at least one week prior to the due date to avoid late fees.