Credit restoration can be an extended process that requires regular attention and disciplined behavior. Many individuals choose to work to repair their credit themselves while others enlist credit restoration services, debt consolidators, credit counselors, life coaches and therapists to assist them in their efforts to restore reestablish their credit. The core principles for restoring good credit are living within your means and paying off or settling existing debts as quickly as possible.
Instructions
1. Attempt to avoid bankruptcy by any means necessary. Bankruptcy remains on your credit report for ten years. You are required by law to report your bankruptcy whenever asked on documents like loan and job applications. All liquid assets are also seized and redistributed after a successful personal bankruptcy filing. The bankruptcy can be denied, wasting effort and legal fees.
2. Contact any creditors directly with which you have late or delinquent accounts. If you have a late account, ask them to remove the late payment entry from your credit report in return for a payment. If the account is delinquent, try to settle the debt. Begin negotiating at 10 percent of the total debt amount, but expect to pay 25 percent or more of the debt. Get any agreement to settle debts in writing from the creditor.
3. Make all debt payments on time after clearing up any delinquent or defaulted accounts. The majority of your credit score is made up of making payments when requested. Keep credit card balances as low as possible to maintain good credit. It may take years, but your credit will be reestablished if you demonstrate a sustained pattern of meeting your contractual obligations.
4. Pay all bills on time. Delinquent bills will not necessarily appear on your credit report, but if they go to collection, it will manifest and damage your score. Set up automated bill payment plans to ensure that you don't make mistakes when paying your bills.
5. Check your credit report regularly for errors. Common mistakes include confusing the credit entries of family members with similar names and mistaken dates. Dispute erroneous entries on your credit report with relevant credit bureaus and include copies of any documentation you may have supporting your claim.
