You’ve undoubtedly seen those infomercials late at night that offer to fix your credit. There are signs and billboards for them everywhere. These companies make it seem like, if you hire them, they can fix your credit overnight. The truth of the matter is that nobody can fix your credit that quickly. It takes time. Not only that, but a company cannot do anything to fix your credit that you can’t do yourself. So what these companies are doing essentially is taking financially vulnerable and desperate people and charging them money for services the person in debt can do themselves.
So how can you fix your credit on your own? The first step is to get your credit report online for free at annualcreditreport.com. This is the only official site to get your credit report. You are entitled to one free copy of your report from the three major credit reporting agencies every 12 months. While you cannot get your score, obtaining your credit report is much more important.
Have a look at your report and see if there are any errors. If there are, write a dispute letter to the agencies letting them know of the mistake and be able to provide proof of your payment (such as bank statements).
If your report is lengthy and you want to tidy it up for a lender to look at, consider paying your smallest debts first. You could also consolidate your debt into one larger loan if you want to pay off all your smaller debts. This is only recommended if you can get a better interest rate on the new loan than your existing ones.
Unfortunately, one of the best ways to clear up your credit is to let time take its course. As debts get older, they have a lesser impact on your credit. After 7 years these debts will drop off your score. Then and only then will you have a clean credit report and a healthy credit score.