Cleanup Credit Restore Your Score

Credit problems are everywhere and just about everyone wants to know how to cleanup credit and increase your score. It's important because these days a bad credit history can mean limited access to future employment opportunities. Bad credit can also create a problem when you're ready to buy a house or get a good interest rate on your next car. If your credit is bad, creating a plan to cleanup credit and rebuild a credit history is a no-brainer.

Admit Problem, Create Plan, Cleanup Credit

Making the decision and starting to move down the road to cleanup credit is easy once you admit you have a problem with credit. Admitting there is indeed a problem is probably the hardest part of this journey. So, let's see if you have a problem with credit and get that confession behind you quickly. You may have a problem and need to cleanup credit if you have too many credit accounts, or if you have trouble making even the minimum monthly credit payments on your credit cards. If this is the case, we need to step back a bit more and take a close look at your spending habits. Let's move on to the next step.

Make List of Expenses: Spend Less, Save More, No Credit Cards

It's time to take a look at the heart of the problem; your spending habits. Get a pad and pencil, find a nice quiet place and start writing down all the expenses from the last 30-90 days. List everything, even down to the smallest items like a pack of gum. What we're trying to do here is take a critical look at just where your money is going. If you get a $4 cup of coffee each day on the way to work, you could save over $100 every month if you made coffee at home.

One family spends around $2,500 each month on eating out at restaurants. If they prepared food at home, they could cut about $1,500 off of that monthly expense. Now what if they could add that to their credit card debt and begin to cleanup credit? How long would it take to pay off all credit card debt if you could throw $1,500 at that debt every month? Not very long. Make a detailed lust of expenses and start cutting everywhere leaving only essential items. You will be surprised at how much money you can save.

Pay Off All Your Credit Cards

Yes, it's a pretty obvious piece of advice. Facts are, if you don't make regular credit payments on your credit accounts, and eventually pay them off, it's going to cost you big time. It's a real easy thing to say you're going to pay off all your credit cards. It's another thing entirely to actually start doing it. What you need is a plan.

Make a list of all credit cards, and start paying all minimum monthly credit payments every month. Find the credit card with the lowest balance and start by doubling the minimum payment on that card only. This card will be paid off soon and when it is, add the amount you were paying on the now paid off credit card and add it to the minimum monthly credit payment on the next card. When that card is finally paid off, add these payment amounts to the third card. Continue until all cards are paid off. You will be surprised at how quickly you can pay off all your credit cards.

The Last Step in the Cleanup Credit Process

If you have followed the plan, after a few months you will start to see some extra cash coming in from the cuts you made earlier. This is money that you can now put toward paying off your credit cards. Now it's time to start cleaning up your credit report. Most everybody's credit report has some errors on it and they need to be removed. Federal law allows for a free credit report for any consumer who requests one. Go to for more details.

When you get that free credit report, you'll want to take some time to study it very carefully. What you're looking for is mistakes, errors, or unverifiable information. Take some extra patience with you when dealing with credit bureaus. Working with and getting information corrected at the credit bureaus can be very difficult. Don't get frustrated, just keep pushing until they get it right, after all it is your credit report and that report is going to help you cleanup credit and rebuild your score.

This is not all going to happen overnight, it's going to take some time. You have to be patient, assertive, and diligent in your efforts to cleanup credit, re-establish a history of credit payments, and rebuild your score. The credit bureaus and future lenders are going to be looking for a pattern of credit-worthiness when considering you for future loans and interest rates. A good credit report could literally save you thousands of dollars over the long term.