After you have settled your debt with all your creditors, it is time to assess the damage done to your credit record. No doubt, if you have been late with payments or been sent to collections, some degree of damage has been done.
Getting your credit reports
The first step is to get a copy of your credit report from each of the three major credit bureaus, TransUnion, Exquifax, and Experian.
You can write each agency for one free copy of your credit report per year.
Getting your credit scores
In addition to getting copies of each of your three credit reports, you need to get your hands on your FICO score. A FICO score is a 3-digit number ranging from 300-850™ that represents your credit rating. Most lenders use FICO scores to help them make loan approval decisions.
Repairing your credit
The process of rebuilding your credit is a bit complicated, but is well worth the effort.
The amount of money you will save in lower car loan and mortgage interest rates can be enormous, and there are many things that are far easier with good credit - everything from renting an apartment to getting a new job.
Start by going over your credit reports, making note of every negative item that you believe to be untrue.
You can contest any item on your credit report, and the creditor has a certain length of time, usually 30 days, to verify it. If they are unable to do so, the negative information should be removed from your report.
Getting help with credit repairs
Since the process of repairing your credit is a bit complicated, it is usually best to get some help in understanding what to do.
A very inexpensive way to do this is to use a professional credit repair kit. Several firms offer these kits online for reasonabloe prices.
Repairing your credit takes some time and effort, but is well worth it in the long run.