If you have a bad credit score, which applies to any credit score under 600, then you should be aware it is possible to radically improve your credit rating. The best way is to obtain a copy of your credit report, make a thorough investigation of all outstanding debts, work with creditors to form a payment plan, and budget in order to pay down the debt. Follow these steps to greater financial freedom.
First, obtain copies of your credit report from legitimate credit reporting agencies. It is unnecessary to pay a company to produce your report. Get a report from more than one company, as not all debts that affect your score will be reflected on every report. Carefully scan the outstanding debts it is not unusual for credit reports to contain errors. If you find a mistake, call the company and write a letter explaining the situation. Companies are willing to wipe clean debts that are mistakenly reported, which happens often.
The next step is to call the companies on the remaining debts and try to negotiate payment plans. Although it can be intimidating, most are willing to work with you to pay down the debt and may reduce the overall amount owed once they begin receiving payments. If the debts are already in collections, try to pay those down first. The final step is to work within your budget to pay down your outstanding debt within your means. Even partial payments will likely begin to improve your score.
Having a bad credit score or a credit score under 600 is not the end of the world as it can be improved. It takes knowledge of the report, close investigation, negotiation and budgeting to improve your credit score. Try these steps for not only a better credit score but also peace of mind.