Start by obtaining a copy of your credit report from the major credit reporting agencies. (You can find more information online at http://www.ftc.gov/freereports.) Then, scan your report for the two following opportunities on how to repair credit.
Collection accounts: If any of your debt has been referred to a collection agency, you must take immediate action. As you make payments, collection agencies update your account status each month, which can actually lower your credit rating by making the average length of your credit history shorter.
How to repair bad credit: Call the collection agency and explain that you are willing to pay off the collection account in its entirety, under the condition that the collector deletes its account from the credit bureaus reports. Not all collectors will agree to this, but its worth your time to try. If the collector does agree, ask them to document your agreement in writing”just in case.
Past due accounts: Listed in the section of your credit report marked delinquent, there is a subsection titled “past due”. Past due balances can also destroy your credit rating. So again, taking immediate action is crucial for your credit rating.
How to repair credit: Explore your options. Find out if there are any ways you can make the payment in full in order to avoid the problem head on. If you can’t find a financial solution, try the same method recommended for collection agencies. Ask if you can set up a schedule to make the largest payments possible – and ask them to keep it off of your record. Again, it is crucial to get this in writing.
Your credit does not need to be brought down by late and unmade payments. You have a fantastic opportunity at redemption from your past financial mistakes if you are will to negotiate with creditors. You will need to pay your debts, but you can save your credit and help yourself in the long run.
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