Step 1: Request a copy of your credit reports from all major credit bureaus. Dispute any questionable negative items on your reports, write to the bureau and ask them to remove the mistakes. It might also help to contact the creditor who reported the error. Some creditors will contact the bureau on your behalf.

Step 2: Negotiate with creditors and work to pay off any outstanding debts. Be careful before paying off old debts as it can harm your credit scores even worse by re-aging the account. Write the creditor a pay for delete letter – an agreement in writing that states that once you pay off the account, they will remove it from your credit report.

Step 3: Rebuild your credit by making all future payments on time and by using credit wisely. If you don’t have a credit card, you should apply for one. If your application is rejected, try to find a co-signer or apply for a secured card – where you deposit some money into a savings account and then get a credit card with a line of credit close to the amount you deposited. Keep credit card balances low.

Step 4: Monitor your credit on a regular basis and lookout for any erroneous or questionable information on your reports. Checking your own credit through a credit monitoring service is OK and will not count against your credit scores.

Learning how to repair and maintain credit can take time, but it’s vitally important to your financial life.  Follow the steps above and you will be on your way to getting the credit you need, when you need it.

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