How to Establish Good Credit so You Don't Feel Ashamed of Your Credit Score

Patience is a virtue if you're in the position of reestablishing your credit standing. There is no quick fix for bad credit scores. If you have negative information on your credit report -- late payments, a bankruptcy, too many inquiries -- follow the advice we've collected for you and simply wait. Time is your ally when you need to start over, build and keep good credit.

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The specific length of time it will take to rebuild your credit history after a negative change depends on the reasons behind each change. Most delinquencies and public record items remain on your credit report for seven years. Some bankruptcies may remain for 10 years, as do unpaid tax liens. And credit inquiries remain on your report for two years.

To get back on your feet

Contact your credit card providers. Talk to your creditors about your situation. Many of them have temporary hardship programs that will reduce your monthly payments until you can get back on your feet. Check your credit report to see what's in it. First get a free credit report from To work on specific accounts, get copies of your credit reports from each of the three major credit bureaus: Equifax, Experian, and TransUnion. Federal law gives you the right to view your own credit report. You should check it at least once a year to make sure the correct information is being reported. Dispute any items you find in your credit report that are inaccurate, incomplete, out of date, or that you believe cannot be verified. If you have negative entries that remain beyond their time limit, you can dispute them. Other things you can dispute include: Payments reported late that were actually on time Accounts that aren’t yours Inaccurate credit limit/loan amount or account balance Inaccurate creditor Inaccurate account status, such as "past due," when it's not You’ll need to submit proof if there’s something wrong with your address, name, date of birth, or your Social Security number. You can send a copy of your driver’s license, recent billing statement, or your social security card to solve these issues. Proof might also be a canceled check showing that you paid your bill on time. Also, a recent billing statement showing your credit card limit or balance. Make sure you send a copy of the proof and keep the original documents for your files.

The credit bureau has 30 days to investigate your dispute and respond to you, in writing, with the results of the investigation. Any data you provided about the inaccuracy of the information will be forwarded to the original information provider. The information provider is then required to investigate and respond back to the credit bureau. Once the investigation is complete, the credit bureau will provide you with the results, along with a free copy of your credit report if the dispute resulted in a change.

Establish good credit habits

Your payment history makes up 35 percent of your credit score. Paying your bills on time is the most important contributor to a good credit score. Even if the debt you owe is a small amount, it is crucial that you make payments on time. Consider using automatic payments to help you. Keep balances low on credit cards and other "revolving credit." New credit card purchases will raise your credit utilization -- the ratio between your credit card balances and your credit limit. The higher your balances are, the more your credit score is affected. Apply for and open new credit accounts only as needed. New credit inquiries can hurt your credit score. Use the credit you already have to prove your ongoing ability to manage credit responsibly. Pay off debt rather than moving it around. The amount of debt you're carrying is 30 percent of your credit score. Start paying off your debts to improve your credit situation. It's very rare that closing a credit card account will improve your credit score. Before you close any account make sure it won't negatively affect your credit. Protect your credit information from fraud and identity theft.

Rebuild your credit

In starting over, major banks won't be much help because of your low credit scores. Fortunately, you still have some options. Shop around for creditors who'll provide service for reasonable fees. Be careful when you apply for this new credit. Make sure you don’t put in too many credit applications. It will affect your credit score, making it harder to get approved for new credit. Watch out for sub-prime credit cards that prey on people with bad credit. These credit cards often have high interest rates and extremely high fees. A lot of people find themselves right back in debt with damaged credit after trying to rebuild with one of these types of credit cards. You have the option of using a prepaid credit card, but it won't help to rebuild your credit score. While you can get a prepaid credit card regardless of your credit history, they don't report to credit bureaus (because they're not credit cards), so using one won't help your credit. If your credit card application is denied, don't rush out and put in more credit card applications. Instead, wait to get the letter in the mail that tells you the specific reasons you were denied. Your being turned down may have nothing to do with your credit score, but could be related to another factor, like your income. Once again, exercise patience.

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