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The first step is to get a copy of your credit report, you are entitled to one free credit report per year. When you have bad credit, it can keep you from realizing your dreams. It’s much more difficult to purchase a house, obtain a student loan, or buy a car.
When you can get do credit from someone and you have bad credit, the interest rate is usually exorbitant and you end up paying a lot more than the purchase price of whatever you are buying. The secret to repairing your credit is to take an aggressive pro-active approach, it will take some time, but in the end, it will be well worth it.
Secondly you want to try to pay off as much as you can on any outstanding debts you may have. What you are trying to do is try to settle as much of the bills as you can that are the reason for the situation you are in. If you can get a bad account listed as closed it will look better than an open one that is currently listed as bad.
You can contact those you owe directly and inquire about entering into some kind of repayment plan. In many cases the creditors will work with you to hammer out a payment plan just so they can at least recover a portion of the debt. They know that it is likely that they will get nothing if they aren’t a little flexible.
If there is any chance that you can come up with some money to make a lump some payment many times you can get an even bigger break. If you ask what they will settle for many times they will take a huge reduction. I have seen cases where the companies settled for $1500 when over $2500 was owed.
There becomes a point at which companies will charge off the outstanding debt, this doesn’t mean they are forgiving the debt it just means they have decided that they know they aren’t going to ever get the money back so they make that notation, this looks really bad on a credit report.
It is always best to try to do as much of this work as you can on your own because if you employ the services of a debt counseling service it will be entered into your credit report. This can raise a red flag with potential new creditors as well and can delay receiving a better credit rating.
Just remember that you are not the first person to be in this situation and you certainly will not be the last. Be patient, you didn’t get into this situation overnight and it will take some time to correct it.
Article source: ContentLog.com
Author Description
Gregg Hall is an author living with his beautiful wife and family in Navarre Beach, Florida. Find more about restoring credit for car loans as well as car care products at http://www.5starshine.com
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