A bad credit history affects your ability to obtain lines of credit. Applications will be declined, and the more this happens, the worse your credit history will get. Knowing what’s in your credit history report is important. Obtain a copy of your credit report for free, once a year, from the AnnualCreditReport web site. This is the only official web site sponsored by the three credit-reporting bureaus: Equifax, Experian and TransUnion. Getting your credit report is the start of getting rid of a bad credit history.
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Request copies of your credit report online from the AnnualCreditReport web site (see Resources). It’s simple, fast, and you can view the report online. Choose the state you reside in from the drop-down menu and click “Request Report.” Enter your details accurately in the online application form. Type the alphanumeric security code into the box at the bottom of the form. Click “Submit.” Select the reports you want: Experian, Equifax or TransUnion. You also can choose all three; they may be different. Click “Submit.” Your identity will be verified. Click the link to open your credit reports. Access is immediate, so you can start to see ways to get rid of a bad credit history.
Print a copy of each credit file. Compare them for differences. Make notes. Check for errors. Highlight them. Detail the correct information. Contact the credit reporting bureau that shows an error in writing (see Resources). Credit-reporting bureaus aim to correct errors in 30 days. This is the fastest way to start getting rid of a bad credit history.
Check the credit file for details about late or missed payments. Payment histories are recorded by each lender and reported to the credit bureaus. Late or missed payments affect your credit history. Pay off accounts in arrears quickly. Ensure that future payments are made on time. Once any arrears are cleared, and you've kept up timely payments for five or six months, your credit history will improve.
Ensure that your utility bills are paid on time. Electricity, gas, water and telephone companies report late payments, and this affects your credit history. Set up automatic bank payments. Having a clean utility payment history will help you get rid of a bad credit history.
Tips and warnings
- If a lender refuses to correct an error, dispute it (see Resources).
- Only get your credit history report from the AnnualCreditReport web site. Other web sites might suggest the reports are free, but they will ultimately charge you.
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