It doesn't take much to get bad credit. You can ruin your credit score before you even realize you have one, or before you realize how important it is to have a good credit score.
Your credit score is a reflection of how you've handled your financial obligations. It's based on information that's been reported to credit bureaus by companies, like credit card issuers and lenders, you have financial accounts with.
If you've paid your bills on time and managed your accounts wisely, you'll have a good credit score. But, if you've made some mistakes — like not paying on time or not paying at all — you'll end up with bad credit.
If you have bad credit, then you know how tough it can be. Bad credit makes many things difficult, impossible, or more expensive. We all know that banks check credit scores before they give you a credit card or a loan. That means the process of buying a house or car is more difficult when you have bad credit. Even renting an apartment is tough without a good credit score. Insurance companies often charge a higher rate for drivers that have bad credit scores. Utility service providers check your credit to decide whether you should pay a security deposit. As years go by, the list of companies who check your credit will probably grow instead of shrink.
No matter how bad your credit is right now, the damage isn't permanent. Credit repair allows you to fix the mistakes hurting your credit and improve your credit score.
Repairing your credit is critical to saving money on insurance, loans, and credit cards, but that's not the only reason to repair your credit. Better credit opens up new employment opportunities, even promotions and raises with your current employer. If you dream of starting your own business or just want the security of knowing you can borrow money when you want to, you should repair your credit sooner rather than later.
You've probably seen advertisements for credit repair on TV, radio, the internet, or even on the side of the road. The good news is that you don't have to hire a professional to fix your credit.
You can do all the same things a credit repair company can do, so save some money and the hassle of finding a reputable company and repair your credit yourself.
Before you can get started, you have to know what you need to repair. Your credit report contains all the information that's contributing to your bad credit. This could be past due accounts, debt collections, high credit card balances, or public records. Read through your credit report to identify the negative items affecting your credit score.
By law, you’re entitled to free credit reports from each of the three credit bureaus each year. You can also order by phone or mail if that's more convenient.
There are a few other situations where you're entitled to a free credit report:
These free credit reports should be ordered directly through the credit bureaus.
If you've already used up your free credit reports for this year, you can order your credit reports directly from the credit bureaus or myFICO.com for a fee. The bureaus all offer a three in one credit report that lists all three of your credit reports side-by-side. The three-in-one credit report costs more than a single credit report, but less than the combined price of purchasing your individual credit reports.
Some of your creditors and lenders might report only to one of the credit bureaus. And, since credit bureaus don’t typically share information, it’s possible to have different information on each of your reports. Ordering all three reports will give you a complete view of your credit history and allow you to repair your credit at all three bureaus instead of just one.
