The very first thing that you must do in order to raise your credit score is to order your free annual credit report and find out what your credit score is. Once you have obtained copies of your credit reports from all three credit reporting agencies: Experian, Equifax, and TransUnion, you must take the time to go over those reports to check for errors and inconsistencies.
It is imperative that you correct any mistakes or inconsistencies as soon as possible. This is the most pro-active step you can take for yourself to increase your credit score as mistakes can and do happen.
Look for accounts that were previously delinquent but which have since been paid off. Find any accounts that were closed or any accounts that aren't yours. Then take steps to correct those errors by contacting the credit bureaus and beginning the process in writing to have these errors removed from the report. This alone can raise your credit score.
Checking your credit report often can also indicate if you have become a victim of identity theft which is something that is happening over and over again with frightening frequency. It affects millions of people and can wreak havoc with your credit rating.
Correcting the problem of identity theft is a process that will take quite some time, but it can be done with patience and excellent documentation. You should definitely be contacting the FTC and filing a police report in this situation so that you credibility cannot be called into question.
In the above section, we discussed extensively the option of filing for bankruptcy. This should be done only as a last resort and if you are in dire financial straits that cannot be solved if you just don't have the means to pay off your debts.
Filing for bankruptcy doesn't have the stigma attached to it that it once did and is nothing to be ashamed of. While it's true that the bankruptcy will remain on your credit report for up to ten years, lenders know that you will not be able to file for bankruptcy again within that time frame, so you may actually be able to obtain credit anyway after a bankruptcy.
Before you resort to a bankruptcy filing, you can first try getting the advice of a credit counselor to help get you back on track when it comes to your money problems. Find a reputable company that provides results and know that you will be paying a small fee for this service, but one that will probably be worth it in the end.
Credit counseling companies not only work with your creditors to secure lower repayment rates, but they provide financial planning advice for you to use in the future so you are not put in the same situation you were in before.
If you do have steady income, you may want to look into a debt consolidation loan. That way you can pay off your creditors and make one monthly payment to one company instead of several monthly payments to several companies.
There are also companies who can help with debt consolidation loans although you can certainly do it on your own. They can, however, secure loans for you with a lower interest rate and shop around to different companies to find you the best debt consolidation loan and help you get out of debt.
