Consumer Credit Repair: DIY Tips

There is no instant solution, but you can improve your credit by determining your current financial status and establishing future goals.

Your Annual Credit Report Provides a Starting Point

Determining where you stand with consumer credit is the first step toward credit repair. You can order one free credit report from each of the three major credit reporting agencies once a year. Order reports from all three agencies, as reporting information can vary between agencies, and so can your credit score. Credit scores are not included in your free annual credit reports, but you can purchase them when ordering credit reports.

Verify Your Credit History: Compare the information shown on your credit reports with your account records. There are a couple of things to keep in mind when reading a credit report:

• Check account numbers and credit lines: Although names and addresses of creditors can change, it's important to check your credit limits, balances, and account numbers.
• Organize Credit Accounts by Category and APR: Make a list of your creditors and organize it according to categories of debt .It's not necessary to include your mortgage or rent; you'll want to pay for your housing first each month. Your auto loan is secured by your car, which may be repossessed if you miss payments without contacting your lender to arrange repayment. Credit cards can pose a challenge as they have higher finance charges (also called annual percentage rates or APRs). Organize your list of credit card accounts from the highest APR to the lowest. The APR appears on each monthly statement.
• Payment Due Dates: If you owe any of your creditors more than one past due payment, contact them immediately. Otherwise, you can risk incurring additional collection and legal fees that add to your debt and ruin your credit rating.
• Your Bottom Line: Enter your balances, take a deep breath, and hit the total button on your calculator. Write the amount down on your list of debts, and affirm your plan to repay this debt. Make extra payments to the cards with the highest APRs and commit to getting them out of your life. Continue that strategy, throwing as much extra cash as you can at your revolving debts until one by one they disappear.

Asking for Help

If you cannot make payments, or have missed making housing payments, please contact a credit counseling agency for help. These agencies can help you develop affordable repayment plans, and may also assist with reducing late fees and other charges that increase your credit card debt.

Sources:

• Annual Credit Report

About the Author:
Karen Lawson started writing stories about birds and surfing at an early age. For more than ten years, she enjoyed a productive corporate career in mortgage banking before moving to Reno, Nevada in 1997. Karen earned BA and MA degrees in English (specializing in writing) at the University of Nevada. Significant areas of research and writing include truth and ethics in creative nonfiction, medical humanities, and the symbolism and lore of birds in American literature and culture. Karen has taught English at a community college, is writing a collection of poetry, and enjoys birdwatching and walking her basset hounds.