These days, having good credit is more important than ever. A bad credit rating can prevent you from obtaining the things that are important, like car insurance, a house, a car, or even a job. If you have you been unfortunate enough to experience late payments, judgments, charge-offs, or possibly even bankruptcy that have made your life a living hell, don't despair; all hope hasn't been lost. With a little bit of time, patience and persistence, you can rapidly boost your credit score 25, 50, or even 100 points.



How can you get your credit rating back to an acceptable point? Well, there are several ways to achieve this goal. First of all, you need to obtain a copy of all three of your credit reports. Experian, Equifax and Transunion are the three major companies that provide credit reports, all three score differently and some even contain different items. Knowing exactly what is on your credit report enables you to decide where to start in your quest to clean up your credit.

After obtaining the copies of your credit report from the three agencies, the next step is to carefully examine them to make sure that all of the information is accurate. Credit reporting agencies are notorious for displaying inaccurate information on consumers' credit reports. If after you've carefully scrutinized your credit reports, you spot errors, now is the time to get all those errors corrected. The best place to start is with the credit reporting agencies themselves. Prepaid legal services is a great and economical legal service, and they are great for helping to dispute items on a credit report. Credit reporting agencies are a lot more likely to remove a disputed item if they receive a letter from an attorney rather than an individual. If obtaining prepaid legal services is not an option, then it's possible for you to dispute the items yourself. Just be sure to send the dispute by certified mail with delivery confirmation to ensure that you know when it was received. Credit reporting agencies only have thirty days to respond to a dispute or the item must be removed from the credit report, even if the information is accurate.

Loans with savings account collateral

One way to quickly boost your credit rating is by requesting a loan from several neighborhood banks. Of course with bad credit this may be next to impossible, but there is a way to do this that will ensure that your loan is approved, therefore offering you a chance to reestablish your credit.

You will need to have some cash on hand in order to execute this plan. Perhaps $1500 is a sufficient amount to start out with. Here is how the plan works: Find 2-3 banks of your choice and open a savings account at each one. Credit unions are usually a lot more flexible. Deposit approximately $500 or so into each account, then after a week or so, request a loan. The key to getting approved for the loan is to request the loan for the same amount that is in the savings account and use the funds from your savings as collateral. Some banks may not agree to the idea at first, but the key is to be persuasive. Ask them to place the money in savings on hold until the loan is repaid.

Now don't run right out and spend the money that was lent to you. It will be necessary to wait until the first payment is due and then pay off the entire loan in full. There are usually no early pay-off penalties for such a loan, and it's a great opportunity to quickly boost your credit score. After paying off the loans in full, the banks may even extend additional credit to you without collateral, but be careful; you don't want to cause new debt to mount, especially if you aren't in a financial situation to handle a new monthly expense.

Pay a small amount on items from credit report

Many people in debt feel that if they don't have the entire amount owed at once that it wouldn't do any good to pay small amounts toward the debt. Many creditors will accept settlement agreements, sometimes for as little as half of what is actually owed. If entering into a settlement agreement isn't possible, then making even small payments can make a big difference. It allows the creditors and those looking to extend new credit to see that you are at least making an effort to be responsible and pay off your obligations. It's better than not attempting to pay anything at all, which could really hurt your chances of landing that new job that you want, or receiving financing for a new car, etc.

The usefulness of secured credit cards

Even if all of the derogatory items on your credit report have been paid in full, it will still remain on your report for up to 7 years. And even though your credit score may not be as low as it was before paying off everything, these entries still bring down your credit score. Building new, positive credit is a great way to change things. Secured credit cards are a great way to achieve this goal. And another great thing about secured credit cards is that you can't be denied a credit card because you choose the credit limit that you have by putting money in sort of a 'savings account'. The amount of money that you choose to deposit will usually equal the amount of your credit limit, but some banks will even make your credit limit one and a half to two times the amount of the deposit, depending on the institution.

Secured credit cards works just like traditional credit cards do. You receive a monthly bill with a minimum amount to pay and the best thing about these cards is that when they appear on your credit report, no one but you and the bank knows that the card is secured. On-time payments ensure credit scores increase, which can make you more likely to get approved for whatever type of loan, job, etc that you are seeking.

Recovering from bad credit is not as impossible as it may seem. As long as you remember the following tips, you should never find yourself with bad credit again once you've gone through the task of repairing it.

- Use your credit cards each month.

- Pay early on bills.

- Develop new credit.

- Try not to carry high balances on credit cards and loans. Use only about 50% to 60% of available credit.

- Pay early whenever you are able.

- Have no more than 4 credit cards, maximum.

- Never be late again!