There are very few people who can just go out and pay cash for the major purchases in life such as a house or a car.
Most people need to get financed for these large purchases and in order to do that they need to have high credit scores and good credit.
However, difficult times can happen to anyone and even the highest credit scores can dip with unforeseen circumstances.
If you have struggled with a difficult time and now you have bad credit there are steps that you can take that can improve and even repair your credit.
Even if you have bad credit now it doesn't have to last and nobody is destined to have bad credit forever.
Even if you do nothing, provided you start now to pay your bills on time, your credit will get better over time.
However, you can speed up the process by taking a few simple steps.
First off, get a copy of your current credit reports from all of the three main credit-reporting bureaus.
You can get one copy for free once per year.
You must get all three reports because they have varying information and they use different algorithms to calculate your credit score.
It is also important to pay attention to all three reports because you never know which report a creditor will rely on or if they will take account of all three.
If you happen to find any type of inaccurate information on your reports, make sure and take note of it.
You will probably need to issue a dispute to the credit bureaus about the erroneous credit.
Anything that does not belong to you, balances, interest rates or credit terms that are misrepresented, even late payments that are misreported can all be disputed.
After you have sent your dispute and you have acknowledgment from the credit bureaus that they have received it, they will have 30 days in which to verify that their reporting is accurate and correct with another 5 days to respond back to you.
If you do not get a positive response from the first letter, you should always try again until you succeed.
Along with issuing disputes to clean up your report you should also make sure that the credit you have now is excellent, meaning that every payment is made on time.
Also a very important factor to your score is actually the debt to credit ratio, which is the amount of debt that you have compared to the amount of credit that you are allowed.
Strive for high credit limits and low debt, preferably under 20% of the limit.
You can also contact the original creditors and see what you can negotiate to have them remove the negative information.
Sometimes you can negotiate a reduced settlement but make sure that they will actually remove the listing from your credit report.