How to Clean Up Your Credit File

Regardless of the mistakes you've made in the past, you can clean up your credit history and earn a score in the 600s or higher. Your credit score is a three digit number that lenders and banks use to judge whether you qualify for financing. Negative items such as collections and bankruptcies remain on reports for seven to ten years; and a low credit score limits your buying power and can lead to higher finance fees and unfavorable loan terms. There are ways to restore your good credit without paying for a credit repair service.

Instructions

1

Review your credit report from the three credit bureaus for negative items. Information on your credit report can contain errors that may lower your credit score. Free reports are available to consumers once a year from annualcreditreport.com.

2

Dispute inaccurate credit entries. Creditor telephone numbers and addresses are listed on credit reports. Call or write the reporting creditor to dispute erroneous information such as unfamiliar accounts. Creditors must investigate potential errors and correct mistakes.

3

Use credit cards occasionally to keep your account active and help raise your credit rating. Spend only what you can afford to pay back in full each month.

4

Don't carry a balance on credit cards. Decrease debt to help clean up your credit file. Avoid high balances and finance charges by paying off credit accounts each month. Exceeding your credit limit drops your score and results in additional fees.

5

Use electronic withdrawals. Set up automatic bank withdrawals to help manage your debts and pay bills on time.

6

Decline invitations for pre-approved credit cards and in-store credit. Your credit score decreases each time a potential creditor reviews your credit report.

7

Negotiate with your creditors. If you are experiencing financial problems, contact creditors to alter your due dates or payment amounts to avoid skipped or late payments.