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Steps to Reestablish Your Credit
 There's no magic to repairing your credit, but with hard work and discipline it can be rebuilt.
The first and most important step in
reestablishing your credit is to avoid any further financial problems. Become financially responsible right away. Make a budget and stick to it.
The next step is to focus on your personal credit report. If you have unsatisfactory credit, it's because the information in your
credit report is unsatisfactory or possibly inaccurate. If the information in your credit report is valid, it cannot be removed, even if the information is unsatisfactory. The main contributors to "bad" credit are:
- Bills have been paid late or not at all
- Too much debt has been accumulated
- Information on your credit report may contain possible inaccuracies
- Etc.
You should
obtain a copy of your credit report to see what's being reported and to correct any errors. Because information
may differ between the three major credit bureaus, we suggest a three-bureau merged report as opposed to a single-bureau report.
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How do you correct errors on your credit report?
Once you have obtained a copy of your report detailing
information from all three major credit bureaus (Experian, Equifax and Trans Union), you should contact the credit reporting agency that provided you with the credit report, to correct any outdated,
 inaccurate or ambiguous information. It
is also a good idea to write to the credit grantor reporting the inaccurate information, including copies of any backup paperwork you may have.
The Fair Credit Reporting Act of 1997
requires the bureaus to validate the information as accurate or remove it from your credit report. In most cases, there is a 30-day limit for the credit reporting
agencies to resolve these disputes and you'll receive written notice of the investigation results within five days of its completion.
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Beginning to use credit again
The third step to rebuilding your credit is to begin using credit.
Obtain a credit card if you don't have one, even if it's a secured card. Use this card a little each month to charge normal purchases such as groceries or gasoline. Then pay the
card balance in full each month to avoid any additional charges. This way you will begin to develop a positive payment history, which is exactly what credit grantors are looking for.
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