- 1). Check your credit report. Before you can clean your credit history, you need to obtain a copy of your report. Review the contents and look for errors. Reporting errors can decrease your score. In addition, collection accounts, liens and judgments can cause your credit score to plunge.
- 2). Apply for a home equity loan or refinance. Persons who own a home have several options available to them. Depending on whether you have enough equity in your home, you can apply for a refinance or home equity loan, and consolidate your debts. Enjoy a lower interest rate and use the money to pay off your creditors.
- 3). Reduce your credit balance. There’s nothing wrong with credit cards. In fact, they can often work to our advantage. Unfortunately, some people don’t have self-control, in which they buy any and everything with credit. Even if you pay your bill every month, too much debt can ruin your credit score. Attempt to pay more than the minimum balance.
- 4). Settle collection and judgment accounts. Unpaid debts reduce your overall credit score. Make arrangements to pay these debts. Once they’ve been paid in full, ask the creditors to remove the negative remark from your credit report.
- 5). Limit credit inquiries. Whenever you apply for a new line of credit, the creditor reports an inquiry to the bureaus. Inquiries remain on your report for two years, and each inquiry can reduce your score by ten points.
- 6). Pay bills on time. One of the easiest (and obvious) ways to clean up your credit is to pay your bills on time. Missed or late payments can easily destroy your credit score. If you can’t keep up with payment due dates, sign up for automatic bill pay, in which payments are automatically deducted from your account on the due date.
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