There are different ways that you can go about repairing your credit. Some of them may offer an “easy” way out, but you'll have to pay the price—in money. Or some people will tackle credit repair by filing bankruptcy, which defeats the purpose and will hold you back from having a clean credit report for 10 years. Are there other ways that you can repair your credit without breaking the bank? Sure…..Let's look at 5 tips you can use in order to do that.



1. Get a copy of your credit report and know what's on it. There are three major credit bureaus (Equifax, TransUnion and Experian) where you can get your credit report from. You'll also want to get your credit score as well. If you have been denied credit in the last 60 days, you can get a free credit report. Some states offer free credit reports to consumers once a year. If you get the credit score along with the credit report, you'll have to pay for the score. Credit repair starts with knowing where you stand on your credit report.

2. Get in touch with your creditors. Advise them of your situation and work out a payment plan with them. Creditors would be more than happy to work out a payment plan than you going into default. If you were to file for bankruptcy, they wouldn't get much of anything. During your credit repair process, it is important that you maintain communication with your creditors in order for them to see that you are serious.

3. If you decide to negotiate a settlement with your creditors, make sure you have the information in writing. It's difficult to dispute anything if you don't have written evidence to back it up. Effective credit repair involves written communication from both parties. After you have settled your debts with your creditors, have them send you a letter notating that. You will need the correspondence as proof to the credit bureaus that your debts have been paid.

4. As you make payments and pay off your debts, make sure you pay them on time. This will not look good on your credit report. As you implement this part of your credit repair, you should be conscious as to when your bills are due. Having a stable and satisfactory payment history will improve your credit report as well as your score.

5. Some people may not think that having a secured credit card is part of credit repair, but it can be. It has to be used the right way. If you're still struggling to pay other bills, then it's not a good idea to get one at that time. Wait until you have enough money to deposit on the card. The secured card works like an unsecured card, except with the latter no money is deposited. Because of the shaky credit, the secured card would have a higher interest rate and additional fees. If you do get one, make sure you're making payments on time each month.

These tips can be used in your credit repair strategies to make improvements in your credit history and credit score. By doing the opposite, you can find yourself right back where you started from.