How can I repair my credit if I don't have a lot of money?

Question

I don't have a lot of bad debit and do not have any credit cards, but I need to repair my creidt and don't even know where to start.

My bad credit is due to me not managing my money correctly. I had no credit and then I opened up a small loan for $300 with a small loan company and did not pay all of this back. That was more than 5 yrs ago. I also had a closed checking acct from when I was a teenager that I never paid off. I have several other small debits, but dont really know where to start. Should I contact each company and pay of the debit?

Answer 1

First, order your free credit reports from all three major credit bureau http://www.ftc.gov/opa/2004/11/freecredrpt.htm. Check for any negative or incorrect information, then you want to send a dispute letter (see sample dispute letter in this website)http://www.ftc.gov/bcp/conline/pubs/credit/repair.htm. To bring your FICO score (there is a cost for FICO score) up you need to get yourself a credit card, charge a small amount on it then pay it off when your bill come. You should check your credit reports at least once a year.

I check my FICO scores (when you order your FICO scores it comes with a complete credit history) every six months. Always order your FICO from the company.

Answer 2

1 - The first step is get rid of any bad debt you have. Pay it off as best you can. If you can't pay it off fully, call the company. Most places will barter for arrangements, allowing a lower payment to just be done with the debt. Something is better than nothing.

2 - Start building some measure of credit. Get a secured or low level credit card, and just buy stuff, and pay it off. Try to keep a balance on it for 20 days at a time, and then pay it off. Don't just have a credit card with nothing on it. A zero balance credit card with no activity is functionally worthless. You don't have to buy a car with it, just charge small stuff, and pay it off before it gains any interest or finance charges.

3- Watch the credit monster. As you build small credit, you'll get hundreds of offers for new cards. Watch it. The recommendation is that you have no more than two credit cards, and maybe one store or gas card. Shop around; as your credit goes from horrible to bad to okay to decent to good, they'll want you. Get the best bang for your buck.

4- Check your credit report at least twice a year. Thanks to federal laws, you now get one free credit report every year. Thanks to a loophole in that law, you get one free from each credit reporting agency (of which there are three; Experian, Trans Union, and Equifax) so you could theoretically get three every year. See how you're doing, and make sure no bad marks are on your report.

There's no quick way to repair your credit report, but this is the most tried and true way.

Answer 3

You may be able to qualify for a few small lines of department store credit cards. Open one or two, make a few small purchases; Kohl's, for instance, does not charge interest, if you pay off one-third of your balance each month. Make sure you are able to pay off the balance on each card each month. Only buy something less than $15 or so, something you really need. Building credit like this, or putting things on layaway, may be one way for you to build up your credit score and rating, prior to you being able to get a better, more universally-accepted card. This was recommended to me by a credit card company, back when I had no established credit.

Good luck. :) I am sure that fortune will be smiling on you soon.

Answer 4

Get a credit card and keep up the payments Don't max it out just keep a balance Don't Even look at credit repair sites

Answer 5

Do you know why you have bad credit ?

Is it because you didn't manage your finances ?

Maybe there is a reason ...