How Do I Re-Build My Credit?

You can never erase or forget the past, especially where credit is involved; negative records such as bankruptcy and collection accounts will remain on your credit report for 7-10 years. But with a little work, and time you can improve your credit even before these negative records expire. Below are 5 steps you can use to help get you going in the right direction:

Step 1: Survey past damage

The first step to rebuilding your credit is to know where you stand. Order all 3 bureaus online, its simple, easy, and secure. Plus, contrary to popular rumors, checking your own credit data never damages your credit scores.

Print each report and review it closely. Highlight any negative records or inaccuracies that are damaging your credit score.

Step 2: Check your dates of expiration

By law, negative records must remain on your credit report for 7-10 years. The exact expiration date varies depending upon the type of record. Paying off an old collection debt or discharging your bankruptcy does not remove these records from your credit reports.

For each of the negative records on your credit report (including judgments, liens, charge-offs, late payments, bankruptcy filings, and collection records), look up the exact date they are set to expire from your credit report. This will give you some hope for as time passes you will likely see a major improvement in your credit score and especially when those records expire.

Step 3: Dispute any error
If you find inaccurate records, fraudulent accounts, or records that should have expired on you credit reports, you have the right to dispute these errors. You'll need to send a separate dispute letter to each of the credit bureaus to correct your Equifax, Experian, and TransUnion records. Once your dispute is received, the credit bureaus have 30 days to investigate and determine whether or not to make the change you have requested.

Step 4: Begin adding positive

After you finish disputing, the best way to improve your score is to add new positive information. Open up a new credit card (or a secured credit card) and use it responsibly each month. Keep your balances low and always pay your bill on time. There are many banks that have cards designed specifically to help people rebuild their credit after bankruptcy.

Sign up for an online banking service that allows you to keep a close eye on your accounts. By not making any late payments, using credit responsibly, and avoiding unnecessary applications for credit, you are building a new history of good credit behavior on your credit report.

Step 5: Monitor your progress

Sign up for a credit monitoring program. Instead of just giving you occasional access to your credit report and email alerts, these new credit monitoring programs include unlimited access to your credit reports and credit scores, identity theft insurance, credit score monitoring, daily alerts, and more.

some info taken from www.credit.com

Learn more about this author, Jennifer Hamby.
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