There are absolutely no quick fixes when you are trying to erase bad credit history. There are a few tricks that can help you improve your credit score to the point where it can be easier to get a loan, but completely erasing bad credit takes time and dedication on your part. Recent bankruptcies and collections can remain on your report for anywhere from five to seven years. Because of this, it unfortunately can take up to several years to improve your credit history to the point where it is spotless again.
Where to Start
The first thing that you should do to erase a bad credit report is to get an actual copy of your credit report and score from all three credit ratings agencies. Once you have your credit report, make sure that all the information on it is true. Also make sure that anything that's over seven years old is purged from the record. Federal laws require that all information older than seven years needs to be off your record. If you find some information to dispute, there are several ways you can do so. You can contact the credit bureau by phone, internet, or certified letter. Make sure that you keep a record of all of your correspondence. When you dispute a charge, the credit bureau must have proof that the debt was legal and legitimate. The burden of proof is on them, not you.
Another route you can take to fix bad credit is to hire and attorney or a credit repair company. There are numerous credit repair companies online, however not all of them are reputable. Make sure you research the company and make sure the one you are dealing with is legitimate. An attorney will draft letters to your credit agency for you as well, but this can become expensive and you can probably have done most of the work yourself. For this reason, these two avenues should in most cases only be used if repairing your score is complicated. One instance of this may be if an ex-husband or other holder of a joint account ran up charges or cases of credit fraud.
Negotiate, Consolidate, and Pay Off
Once this step is done, the long process of repairing your credit begins. First, resolve not to miss or make a late payment on any of your debt again. Even late payments can stay on your credit history for up to five years. Every late payment you make will put off the time until you are able to have good credit again for that much longer.
If you are having trouble getting your payments in on time you may be able to negotiate or consolidate credit card debt. Be careful when doing, this because unless you state otherwise negotiated settlements will show up on your credit report. Make sure that when you negotiate with your company you stipulate that in return for paying, they will remove all the black marks from your credit history. Consolidation is another option depending on interest rates. Interest rates right now are at some of their lowest rates ever, so it is very possible that you can get a home equity or other type of loan for a very competitive rate compared to the rates you are paying on your other debts. Make sure to secure your debt so you can avoid high risk personal loans that carry prohibitively high interest rates.
Next, try to pay down all your debts, especially your credit cards. The percentage of your credit that is in use can account for close to thirty percent of your credit score. So try to keep your revolving credit (credit cards) to as low of a balance as possible. If you have any outstanding of delinquent accounts, make every attempt to pay them back in full. Contact your creditors and tell them that in exchange for payment in full you expect to be able to have all information of the debt removed from your credit history.
It can take a very long time to erase bad credit reports. Unfortunately, your options to do anything about it are relatively limited. Instead of looking for a quick fix, make some changes to your finances and start looking for places to save money every month so that you can pay back your debts faster. Every debt you pay back and every bill you pay on time brings you one step closer to good credit.