Bad credit not only affects your finances, but many other aspects of your life as well. Bad credit affects how much you pay for your insurance premiums, cell phone, gym membership and even utilities. If your credit is bad enough, these services may deny you altogether. Your credit can even affect where you are able to live or whether you get a job or promotion. There is no easy fix for bad credit, but you can repair bad credit over time with the following tips.

Before you can repair bad credit, you need to know what is on your credit report. You are allowed to get one free copy of your credit report from each of the three credit reporting agencies each year. Some states even let you get your report twice a year. Go to to request your free credit reports. This website is the only one authorized by the government to give you a free credit report. You may be able to get a free credit report from other sources, but you will usually have to buy a service or product first. Make sure you request a report from each agency because some creditors and lenders may only report to one or two of them. The three credit reporting agencies are Experian, Equifax and TransUnion. The credit report may be free, but you will have to pay a fee to get your credit score. Make sure the score you get is an actual FICO score because this is what lenders look at.

Check over your credit report for anything that could lower your credit score so that you know what you need to work on. Also check for inaccurate information, such as accounts that don't belong to you or payments that were reported late when they shouldn't have. If your credit card company recently increased or decreased your credit limit, make sure this is reflected on your credit report. If your low credit score is a result of incorrect information, you can fix bad credit by simply correcting the error. Contact the credit reporting agency to file a dispute. You will need to file a dispute with each agency separately because they don't share information with each other.

Each time you miss or are late on a payment, it is recorded on your credit report. Your payment history has the largest impact on your credit score, so if you want to repair bad credit, you need to pay all of your bills on time. If you have overdue bills, don't hide from the debt collectors. If you show that you are willing to work with them, you may be able to reduce how much you owe and work out a reasonable payment plan. Make sure you get any agreement in writing.

Work on reducing the amount of debt you carry to repair bad credit. Even if you pay all of your bills on time, your credit score will be lower if your debt to credit ratio is too high. Your debt to credit ratio is the amount of debt you carry compared to your available credit limit. If the amount of your debt is high compared to the amount of credit you have, your credit score will be lower. Reducing your debt will lower this ratio and help fix bad credit. As you reduce your debt, gradually close unused credit cards. Don't close these cards if you still have a lot of debt, however, or you could actually lower your credit score further. Keep your oldest account open because this establishes the age of your credit history. The longer your history, the better your credit score.

If you have very bad credit or an overwhelming amount of debt, seek debt counseling. A debt counselor can help you turn your finances around, repair bad credit and avoid bankruptcy. Make sure the financial counselor you want to use is qualified and check with the better business bureau for complaints.