Credit repair becomes an absolute necessity when you get to learn that you have a poor or adverse credit rating. While getting to know from a copy of your credit report that your FICO score, your rating of credit worthiness, falls below average(i.e. below 550) you need to resolve to take suitable measures to bring it up to normal levels. For this you need to follow the right course of action and take up the most appropriate steps.



To start with, you need to secure a copy of your credit report. Upon checking if you detect any errors, omissions etc. in your report then you need to make sure that they are duly redressed by reporting to the concerned persons (creditors etc.). This is not really a measure to repair credit. Rather, it is a check and rectification of the credit report.

The first credit repair measure you can take up is to establish a family budget. This can prove to be a crucial step towards credit repair. This should include calculated spending for day to day and other family expenses so that lesser use of credit cards is involved. Timely payments to be made towards debts and bills are also to be contained in this budget. Outstanding accounts and pending debts need to be settled before proceeding with adopting further credit repair procedures.

The old credit cards not in use anymore can be closed with the associated accounts. The new account status after reduction in the numbers of credit cards is to be reported to the credit reporting agencies. They can take note of it while preparing your future credit reports.

The creditors may be requested to reduce the credit limits on your account. Going for a prepaid credit card can be a novel way to limit the amount of spending you can make using credit card. Credit reestablishment measures including co-signing on a loan or credit by a family member or friend and making of timely payments here are very useful. These will go a long way towards credit repair by preventing the possibility of further credit damage. It is also a good idea to keep a secured credit card and keep some designated amount, sufficient to cover your charges, in the account. By making timely payments in here too will help reestablish your credit gradually.

Finally, avoiding bankruptcies, tax liens and collections will help you stay clear from the black marks which remain in your report for a long time and mar your loan prospects.