Carrying around a bad credit history is a heavy load. It can have immediate and serious consequences on your personal financial life, making it hard or impossible to qualify for house or car loans, and can even cause an employer to decide not to hire you. Despite radio and television advertisements to the contrary, there is no quick-and-easy fix to a bad credit history. The passage of time is the surest bet, though there are some proactive steps you can take to improve your credit now.
Wait
In general, adverse credit information stays on report for seven years. Some types of bankruptcy don't come off for 10 years. Waiting for your credit report to correct itself is a maddeningly slow process, but ultimately works. The key is that you don't acquire any additional bad credit items in the meantime, because any time a new late or missed payment goes in your file, the clock starts all over on that item. Take care that you order a credit report after the time span has elapsed to make sure that items set to expire actually are deleted from the record.
Review
The first thing to do when it comes to repairing your credit is to order a report from the three major credit reporting bureaus, Equifax, Transunion, and Experian. Put these names in your files and don't lose them. They hold the key to your financial future. The good news is that they are required by law to provide you with a free copy of your credit report each year. If you haven't looked at yours in a while, do yourself a favor and order them. False bad reports and outright wrong information that negatively effect your credit happens frequently.
Dispute
There is a dispute process in place in the event you find a negative item on your credit report that shouldn't be there. Write a letter to the bureau in charge of the erroneous report, and don't forget to send it certified mail with "return receipt requested" so you will have proof they received it. You might be tempted to think that your case could be helped by one of the myriad of "credit repair" companies. The truth is that attorneys for the Federal Trade Commission claim they have yet to find a legitimate credit repair operation that lives up to their claims.
Be Proactive
The best way to improve a bad credit history is to never let it happen in the first place. Sounds simplistic, but those experiencing financial trouble tend to adopt a head-in-the-sand approach and hope the problems will disappear on their own. Here's a bit of advice: they won't. Call your creditors and discuss payment plans ahead of time. They spend so much time chasing bad debt, they'll treat you like a king just for keeping them in the loop. A simple phone call now could save seven to 10 years of waiting for a missed payment to stop terrorizing you.
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