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What to do When Your Credit Is Bad

Wednesday, March 3rd

What to Do When Your Credit Is Bad

Many consumers assume and hope they are in good financial shape until they go to make a major purchase and are declined. Whether you were aware of your credit issues or were just recently informed, the only way out of a bad credit situation is to take action. Below are some steps to improving your credit score. Remember there's no quick fix available.

Take a Look

Order a credit report from Experian, Equifax and TransUnion - the three credit reporting agencies. Take a look at what each report says about you. Closely look over your credit reports and see what errors exist. Common errors include incorrect account information that is not yours, payments reported late in error, aged items that should be removed, missing details and more. It's free to dispute errors and is your legal right under the Fair Credit Reporting Act. You can make disputes online, over the phone and via mail. Experts advise following these rules when disputing credit items:

  • Don't dispute several items at once. Only report one dispute per letter, call or online submission. If you attempt several at once the credit agency may automatically assume they are not valid and will disregard.
  • If you are looking for the easiest method of disputing your credit reporting the online route is the fastest but will require you keep good notes.
  • When you do submit your dispute (mail, phone, online) you have to include a copy of the actual credit report item. Highlight which entry you're referring to so that you're effort is not wasted. If a credit agency is confused in any way they will return as such and you have to start the process over.

Get Help

Feeling overwhelmed or know you don't have the time to manage such a detailed project? Several credit repair companies exist today that are relatively affordable, are experts in this field and do a great job of managing the process for you. Many companies can also give you advice to start making smart financial decisions that positively impact your credit score.

Use a Prepaid Credit Card

If you've lost the use of your credit card you can still have the same convenience of a Visa or MasterCard by using a prepaid credit card. Prepaid credit cards are purchased and loaded with the available balance you'll have access to spend. Be sure and identify what fees are accessed with your prepaid card and how future balances may be loaded for your convenience.

In summary, if you have damaged credit the only way out is to take immediate action. Investigate the damage, fight the inaccuracies and get help if needed. A prepaid credit card will help get you through until your credit score improves.

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