Bad Credit Report? Here's What Can You Do

What if you find out you have a bad credit report? Does it really have any effect on your ability to get a loan. Yes. And with an uncertain economy, lenders are looking over credit reports and scrutinizing every little detail. They are under pressure to make sure the money they loan out now actually gets paid back.

With so many defaulting on loans, any single black mark on your report can block you from getting that loan. Then comes the double whammy. A record that lender looked into your report and denied you credit is now also on your report.

So what can you do? Several things. First and foremost, make sure everything on your report is accurate. With all the fraud and identity theft out there, and just because of human data entry error, discrepancies and false reporting can occur. It is important that you keep tabs on any activity that is hitting your report. That means keeping good records of your purchases and payments.

If you have legitimately been reported for delinquent payments or skipping a payment, contact the creditor and work out a deal. Put it in writing how you plan to handle the debt, the payment amounts you will make and how long it will take you to clear the balance due. Ask if they will then rescind the report and when. They may say they will only when the debt is paid. With all the hooey they hear everyday, you can't blame them. Abide by their rules and get the balance paid down.

If you still are in good standing with a credit card, make purchases that are manageable and pay them off on time. If you only qualify to get one with a high interest rate, so be it. Use it reasonably several times a year and always pay it off. A lot of people look at the most current transactions to determine your reliability.

Of course, getting out of debt is the best idea, but not entirely. A little current debt that is paid on time is the best way to bump up that credit score. It will take time. Do not be tempted to go to a counseling service or to one of theses companies you see on TV that promise to erase your debt. Why spend more money if you think you can develop enough discipline to do it yourself? Use that money instead to pay down your debt. Companies that you owe money to would rather work it out with you than with an agency.

Many people with bad credit want instant rectification. It won't happen, There are no such things as "do-overs". Even erasing false info takes time. But most people with bad credit reports got that way by themselves. It is up to you if you are in that boat to get yourself out. You have to take the initiative to make the changes and to straighten out past mistakes.

Finally, accept the comeuppance. In time, the bad marks will drop away and only good debt will be on your report. The important thing is to stop the bleeding and make sure it stays stopped. That is the best way to repair your bad credit report.