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What to do to Clean Up your Credit Report

By Ruth Racey
Published: Wednesday, December 9th, 2009

The economic downturn has resulted in many families finding their credit scores in shaky ground. It takes years to clean up a bad credit score, but there are things you can do to make it better.  

To improve your credit report, the first thing you have to do is find out what your actual score is. You can obtain a copy from any of these three credit bureaus:  Experian, Equifax and TransUnion. There is no need to worry about the cost since these credit bureaus are obligated by law to issue free credit scores to interested parties at least once a year.

The website will require you to answer some relevant questions about your credit history, after which you will receive an electronic credit score report from the bureaus or credit reporting agencies. Carefully study the entries in the reports. There might be erroneous entries which are contributing to your poor credit scores.

In case you do spot errors in the report, immediately contact the bureau that provided you with the report. The concerned bureau will help you go through the process of cleaning it up, and jumpstarting the process of bringing your credit score back to its former credible status. 

Misuse of credit cards, in many instances, is the primary reason people get poor credit scores. If you have one or two active cards, make sure not to miss out on payments. Paying early can make a lot of difference between getting a poor or a desirable score. Be conscious of credit limits for each card and prioritize bills. You might think that paying the required monthly minimum would be enough. However, like paying late or missing payments, it actually lowers your credit score further. 

Your total debt in relation to your earning capabilities is another thing credit bureaus look at. It is best to pay off one or two cards especially the smaller ones. This will look good to the bureaus. For cards with bigger balances, you might encounter difficulties sorting them out. If so, credit consultants, like the Consumer Credit Counseling Services, can help you come up with strategies to lessen your burden. 

As a last resort you can file for bankruptcy to clean up your credit report. However, filing for bankruptcy should be for people who are facing really serious financial problems. Claiming bankruptcy means that you still have to pay your debts, but in greatly reduced amounts. Bankruptcy will have a negative impact on your credit score for seven years, but at least you will be relieved from financial stress which should allow you to nurse your credit standing back to health.  

The economic downturn has resulted in many families finding their credit scores in shaky ground. It takes years to clean up a bad credit score, but there are things you can do to make it better.  

To improve your credit report, the first thing you have to do is find out what your actual score is. You can obtain a copy from any of these three credit bureaus:  Experian, Equifax and TransUnion. There is no need to worry about the cost since these credit bureaus are obligated by law to issue free credit scores to interested parties at least once a year.

The website will require you to answer some relevant questions about your credit history, after which you will receive an electronic credit score report from the bureaus or credit reporting agencies. Carefully study the entries in the reports. There might be erroneous entries which are contributing to your poor credit scores.

In case you do spot errors in the report, immediately contact the bureau that provided you with the report. The concerned bureau will help you go through the process of cleaning it up, and jumpstarting the process of bringing your credit score back to its former credible status. 

Misuse of credit cards, in many instances, is the primary reason people get poor credit scores. If you have one or two active cards, make sure not to miss out on payments. Paying early can make a lot of difference between getting a poor or a desirable score. Be conscious of credit limits for each card and prioritize bills. You might think that paying the required monthly minimum would be enough. However, like paying late or missing payments, it actually lowers your credit score further. 

Your total debt in relation to your earning capabilities is another thing credit bureaus look at. It is best to pay off one or two cards especially the smaller ones. This will look good to the bureaus. For cards with bigger balances, you might encounter difficulties sorting them out. If so, credit consultants, like the Consumer Credit Counseling Services, can help you come up with strategies to lessen your burden. 

As a last resort you can file for bankruptcy to clean up your credit report. However, filing for bankruptcy should be for people who are facing really serious financial problems. Claiming bankruptcy means that you still have to pay your debts, but in greatly reduced amounts. Bankruptcy will have a negative impact on your credit score for seven years, but at least you will be relieved from financial stress which should allow you to nurse your credit standing back to health. 

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