Your credit history affects every aspect of your financial life. The interest rate you pay, your employment opportunities and whether or not you qualify for a loan or mortgage are based on lending companies and their opinion about your credibility and credit risk. Repairing damage to your credit is one of the most important financial decisions you can make. Here are some tips to get started:

1. The only way to fix the damage long-term is to first admit how your behavior caused the damage. Whether it began in college when money was tight or from a less than serious attitude about credit, the damage is often a result of a lack of control or an impulsive nature. Unforeseen situations and unexpected emergencies may have caused a temporary setback. Understanding your role is key to correcting the problem.
2. Do the math. If your expenses exceed your income, you need to find ways to cut your spending. Prepare a detailed budget and stick to it.
3. Take advantage of the free credit reports you are allowed each year from the three reporting agencies: Experian, TransUnion and Equifax. Check for errors and make sure they are corrected as soon as possible by visiting AnnualCreditReport.com or calling 1-877-322-8228.
4. Post a comment to be included in your credit report explaining your situation. Future creditors may take it into consideration and approve your request, if they know of your extenuating circumstances.
5. Don’t ignore old debts or your current creditors. Work with them to pay down your unpaid balances in a timely manner.
6. Be prepared for emergencies so that your debt situation doesn’t get any worse. Start an emergency fund. Commit to a specific amount each month and set it aside. Your goal should be to have enough cushion to cover at least 6 months of expenses.

By diligently following a budget, reviewing your credit history and communicating with your creditors, your dedication and commitment will payoff. But it will take time– so be patient.

Posted in Credit Tips

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