How to Repair Your Credit

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Whether you are trying to buy a home, rent an apartment, or take out a loan, you will eventually learn how important it is to have good credit. Almost any situation that depends on your ability to pay on time and regularly will use your credit history to decide how much of a risk you are. The lower your credit score, the more of a risk you are and the more difficult these types of situations will be.
Fortunately, there are ways to rebuild your credit. None of them are quick or easy (anytime you encounter a program claiming they can make it quick and easy should be avoided!) but with time, patience, and discipline you can raise your credit score exponentially. 
There are quite a few ways you can do this. The most first and most important step is to get a copy of your credit report. It will show you your credit score as well as used credit. Review your credit report for any mistakes, such as credit lines you did not open, and dispute them. Send a letter you credit reporting companies outlining the items you are disputing. They will investigate and, if they agree that the item is a mistake, take it off of your report.
Next is one of the most obvious ways to repair your credit: pay off past due items on your report. Call each creditor and make manageable payment arrangements. Make sure to consult your budget before you do this so that you know how much money you have to pay off your debts. When you have you know how much you can use for debt payoff, you can either make smaller payments to to multiple creditors or larger payments to one creditor at a time until it is payed off, and then move to the next one. You can also consolidate your credit items or transfer them to one credit card (known as a balance transfer), so that you can pay your debt with one payment. These won’t immediately help your credit but they may be easier to manage than making payments to several creditors. You should also note that these two methods are quite controversial.
Some people forget that paying down debt is not the only way step in repairing credit. Making consistent payments on existing loans and credit cards, in addition to paying down debt, is an important step to take. You may also want to consider getting a secured credit card, which uses your deposit as collateral and basis your credit limit on your deposit as well as your your income and ability to pay.
As previously stated, none of these methods will be easy and you will need discipline to continue making payments. If you have gone into debt due to continuous overspending, it is also recommended that you explore the reasons why, either on your own or with a therapist. Regardless, it is often a good idea to at least consult with a credit counselor to plan out your credit repair. You don’t have to do it alone.

By: Alecia Stanton

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