Step 1: Review Your Credit Report

• First thing, get a copy of your credit report. Check it thoroughly for notations made to the report that has damaged your credit:
  
  click to obtain a copy of your report
  
  
• The most likely areas that you should investigate:
  
  — late payments
  — collections
  — incorrect marital status
  — incorrect account histories
  — closed accounts incorrectly listed as open
  — judgments, tax liens, and lawsuits
  — credit histories of someone with the same name or SSN,
  — other
  
  
• You need to check your report accurately and take corrective action where needed to remove or clean up negative assessments. You have the right to dispute any remark on your report that you believe may be inaccurate or incomplete.
  
  link to our credit monitoring services for information on credit reports and repair services
  
  Continue to check your report at least annually. Post the credit report next to your finances. Use it as a goal reminder to reestablish your credit and control your spending.
  

Step 2: Close up loose ends

• Take care of any collection accounts that may be on your report. Make sure they are paid and then listed as paid on your credit report.
  
  If you have problems paying collections, you may seek debt counseling services who can negotiate a reasonable repayment strategy. See Credit Counseling Services.
  
  
• Consolidate your existing credit card balances into one reasonable repayment plan. The repayment plan will become part of your family budget as discussed in Step 4.
  
  Link to our debt consolidation center for consolidating card balances.

Step 3: Close your existing credit and retail card accounts

• If the credit card has got you in trouble, you need to break the cycle of "instant gratification".
  
  Contact the issuing credit card company and request that they close your accounts.
  

Step 4: Establish a family budget

• It is a good policy to setup a family budget so that you know how much to allocate each month for housing, utilities, food and other expenses.
  
  Your budget will need to include payments each month to reduce your existing debt. You may want to consider consolidation plans where the monthly repayments may be in line with your budget planning:
  
  see budget planning
  see debt consolidation plans

Step 5: Apply for a pre-paid credit card

• Since credit cards are must in today's economy, enroll for a pre-paid credit card program.
  
  Pre-paid cards work and look exactly like credit cards. But your use of the card is limited by the amount of cash you load to the card. It is like working with cash with the use of a credit card. You can also enroll into the Credit Builder Program to reestablish your credit history.
  
  enroll into our pre-paid card program: more information available

Step 6: Limit inquiries to your credit report

• Every time you apply for credit or for some other contractual service, an inquiry will be made on your credit report. Try to avoid unnecessary inquiries.
  
  
• Multiple inquiries can hurt your credit. You should limit inquiries to 1 inquiry for every 6 months.
  
  
  

Step 7: Open deposit accounts

• Deposit accounts, especially savings and money market accounts, show stability. Open a 1-2 accounts and maintain a significant balance.

Step 8: Avoid bankruptcy

• You will want to avoid bankruptcy at all costs. Bankruptcies will remain on your credit report for 10 years from the date that you filed.
  
  You should first seek credit counseling services before discussing any bankruptcy filings. Credit counselors can work to forgive part of the debt and/or structure a repayment plan that meets your budget. Make an inquiry on your credit problems.
  
  
• Those who have filed bankruptcy can still improve their credit by following the steps outline here. With work and patience, these applicants may qualify for some forms of financing.
  
  You should seek credit counseling services for help with bankrupt credit reports.
  

Step 9: Seek help if needed.

• You may want to contact a credit counseling service if you can't resolve your credit problems on your own or if you need additional help.
  
  These non-profit credit counseling organizations can negotiate in your behalf repayment plans that are acceptable to your and your creditors. They can also help you set up a budget:
  
  Get started with an inquiry on your credit needs