All the Steps to Improving Your Credit

by Diane Conlinn, February 2, 2001

I personally believe it is better to get rid of unsecured credit and never use it again. So, I don't personally care if my credit report is ever repaired. If I just keep doing what I'm doing, my credit report will be repaired. Time heals all wounds. I also believe in repaying one's debts.

But, if you want your credit rating restored, the steps below have been found helpful.
1. Get a copy of your credit report from the three major credit report agencies:
Trans Union:


Each of the above agencies will tell you how to get a free report or a copy of for a nominal fee, usually a total of about $25. (Note, other places who provide this service charge more than this for all three).
2. Note any erroneous statements, and be sure to write a certified letter to the agency requesting their removal. Please note their identification requirements.
3. Repay your debts and once they are paid get a letter from that creditor or a receipt showing the account is paid in full. Write a certified letter to the creditor and ask them to please note that the account is paid in full.
4. Note that getting items removed by the Credit Reporting Agency doesn't keep them removed. The next reporting cycle, if you haven't satisfied the debt, the debt will be reported again, and the bad comments will be back on record. That is why repaying the debts is really a fine way to get your credit improved.
5. Declare bankruptcy and after 10 years the bankruptcy is removed from your credit report and all the debts that went with it.
6. Go to a debt relief organization and have them handle payments to your creditors. There will be a note on your record that they did this, but many creditors don't necessarily find that to be a bad thing.
7. Find out what your credit rating is. The following link has a free credit rating analyzer. (They also offer other services, and I have no idea whether they are good or bad)
8. Reestablish your credit by paying off small loans, or getting a secured credit card (Use any online search site and look for "secured credit card:). I would recommend only using credit companies you've heard of. And read the legal agreement before you sign so you know the details such as interest rate, late fees, if there will be interest gained on your savings backing the secured credit card.

Pay these credit cards on time or earlier. This serves two purposes, first you find out if you can handle credit, two, you establish new credit by showing your ability to repay your debts.


The second method which I prefer is to repay your debts, and not incur unsecured credit again. Save money to buy the things you want, don't pay the interest to a creditor, gain interest by saving money in a bank account, or by investing in bonds,stock, or the money market.

Pay cash for your cars. Pay up front for everything that you can. And only obtain secured loans for other items, such as buying a house. Sometimes buying a house is not a good investment in a market where housing rates aren't going up, unless the tax benefits are substantial enough. Investing your money in stocks is better. On the other hand, in some parts house prices are rising so rapidly that you could make enough to fund your retirement out of investing in a home and paying it off.

About four years ago, I decided would rather sit on the floor, or sleep in a tent rather than get unsecured credit again. But, if you do want to get credit again, follow the advice above, and within six months to a year following you'll be back in business again.

For more information about what you can do about a variety of legal items, I recommend going to and looking at their website which has a lot of good, free legal advice, and plus several great books on bankruptcy, credit, student loans, etc.

I am not a lawyer, thus, if you have questions, about this please check with your attorney. Thanks.