Repairing Your Credit
Why should you repair your credit?
Good credit will allow you to get a loan or a mortgage on a house. Bad credit can prevent you from getting a mortgage on a house or getting a loan for a car or for your education.
How do you get "bad credit"?
You can get bad credit by not paying your bills on time. If you owe money to a hospital, clinic, credit card company, or utility company, etc. and have either made late payments or have stopped making payments altogether, you could have bad credit. You should review your credit report periodically to know your own credit situation.
Is there any easy fix for bad credit?
Some companies promise to repair your credit in exchange for large fees, however, only making regularl payments on your debt can fix your credit. Occasionally, there are errors on your credit report that you can fix by contacting the credit-reporting agency that issued the credit report to you. For example, your credit report might list an unpaid bill that you in fact did pay. To remove this error from your credit report, you would have to provide proof of payment to the credit reporting agency, by providing a cancelled check or a copy of a money order you used to make the payment.
Where can you find out more about your credit or get help with repairing “bad” credit?
Be wary of companies that offer to help you repair your credit in exchange for large fees. In many cases, free or low-cost help is available through nonprofit counseling organizations.
Even if you think you have good credit, it is important to sit down with an experienced counselor who can walk you through your credit report, especially if you plan on buying a home. Additionally, these counseling agencies provide money management classes that help you to better understand how to maximize the value of your money. If you do have credit problems, these organizations can provide in depth one-on-one credit counseling to help get you on a payment plan.