How to Repair Your Ugly Credit

A high credit score helps make you eligible for mortgages and auto loans, and you'll qualify for better rates on credit cards. Being irresponsible with the credit you have can result in a poor credit score, but it is possible to fix an ugly credit history and receive a credit score in the 700s or higher.

Instructions

1

Lower your credit card balances. Debt balances account for 30 percent of your credit score, according to MyFico.com. Pay down or eliminate credit card debt to help boost your FICO score. Use extra money to pay down your debts, making higher payments each month until the balance disappears.

2

Avoid a bad payment history. A late or missed payment may not seem like a serious matter, but even one late or skipped payment drops your credit score. Diligently pay bills such as credit cards and auto loans before or on the due date to avoid additional charges and a bad credit rating.

3

Report mistakes to the credit bureaus. Ignoring or being unaware of credit report mistakes can lead to an unwanted surprise when you apply for credit. Once or twice a year, order your credit report from annualcreditreport.com and review the document for mistakes.

4

Decline credit card offers. Credit card companies constantly send preapproval offers in the mail, and retail stores routinely ask customers to complete a credit application. Excessive credit inquiries reduce your credit score. Only apply for credit when necessary.

5

Face old debts. Collections and judgments will not immediately disappear. Rather, they remain on your credit file for at least seven years. Get in contact with these old creditors and negotiate a complete payoff or debt settlement. Speak with an account supervisor and ask that the creditor delete the negative item from your credit report upon receipt of payment. If the company complies with your request, ask them to put the agreement in writing.