Bad credit can be a burden. The decision to use credit cards without any idea of the consequences can end up in delinquent payments or even bankruptcy. This could stain your credit record for up to ten years!

With bad credit, you can’t easily be approved for a home loan or traditional bank loan. Bad credit could even deny you from insurance or employment. This can leave you in an uncomfortable situation if you want to make large purchases like buying real estate or a new car.

If you’ve got bad credit, you’ll need to take action now to repair your credit history. Here are 5 easy steps you can take right away to get you back to better credit and more buying power.

  • 1.    Get a free credit report.

If a company denies any application you submit for employment, insurance, or credit because of your credit history, you have the right to a free credit report within 60 days of the denial. Here are a few other instances when you are entitled to a free credit report:

–          You’ve become a victim of identity theft.

–          You’re on welfare.

–          You are currently unemployed and intend on looking for a job.

2.    Write the credit reporting company.

If you feel there is misinformation on your credit report that is negatively affecting your credit history, contact the credit reporting agency by writing them a formal letter that explains the mistake. Provide them with copies (NOT originals) of any supporting documentation. They have 30 days to investigate your claim and respond to you in writing. If the dispute results in a change in your credit report, they will provide you with another free copy of your updated credit report, reflecting the correction.

3.    If you have earned bad credit, it will take time to repair.

If you declare bankruptcy, have delinquent payments, or have a collections company come after you, this will stay on your credit record for up to ten years. But you don’t have to wait that long to start improving your credit rating. You can start repairing your credit today. First thing you can do is talk to a credit counselor. If you really can’t pay your credit card bills and you continue to spend more than you earn, speak with someone who can help you deal with your debt.

4.    Pay your bills on time.

You’d be surprised how this simple action can do a lot for your credit score. Set up payment reminders for your credit card and basic living expenses (i.e. utility bills, rent or mortgage payments, car payments, etc.) so you are never late for a payment. If you know you will always have enough money in your bank account, you can also set up automatic withdrawal so your bills are paid on time every time.

5.    Know your financial options.

If you’re in an emergency situation where you have bad credit and need money fast that you will be able to pay back quickly, then consider a personal loan that doesn’t require a credit check. Title loans are one option, as most banks will not consider giving a traditional loan to a candidate with bad credit. Just make sure you fully understand the conditions of payment, the interest rate, and the terms of your agreement.

Repairing bad credit in Arizona doesn’t have to be a painful process. With careful planning and the right actions, you can start to change your credit history today.