Cleanup Credit Score and Begin Rebuilding Credit

How do you rebuild a credit history and take steps to cleanup credit? The process of rebuilding your credit history and improving your credit score is simple, but not always the easiest thing to do. All you have to do is look around and you can see the huge numbers of people and companies that want to help you cleanup credit, provide some help with your score, and start to settle all those credit payments.

Part One of Operation Cleanup Credit: Admit There is a Problem

One of the hardest things for folks to do is to admit that there is a problem with spending too much. Perhaps you have too many credit accounts. Or you're finding that it's getting harder and harder to make the minimum payments on all those credit cards. Maybe your bills and credit payments are out or control. Every one of these things do affect credit and the way credit bureaus do their credit scoring. OK, it's time to admit that spending, in particular credit spending, is out of control. You have a problem. It's OK, we all have problems. Now that you have confessed your credit sins, it's time to start down the road to getting a good credit score.

Yes to Saving Money, No to Any More Credit Card Spending

The first stop on your journey back to financial freedom and a higher credit score is to break some old habits and establish some new habits. It is said that if you can do anything for 30 days, it will likely become a habit. So, for the next 30 days, you're going to turn from the evil credit lenders and spend only cash for purchases. While you're developing that new habit of paying cash, you're going to concentrate all of your remaining powers on paying as much money as possible to the credit cards and credit accounts you already have. If all you can pay is the minimum amount due, then do that.

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Cleanup Credit by Starting to Pay Off Credit Cards

So, you're concentrating on putting as much available cash towards paying off your credit cards. Operation Cleanup Credit is well underway. This one single thing will perhaps do more to affect credit and ultimately raise your score. Commit to paying off all your credit cards and credit accounts. Here's how the process works: Make a list of all credit cards, balances, and monthly credit payments. First, pay at least the minimum on each card every month, on time. Next, when the first card with the smallest balance is paid off, take that amount and apply it to the next card in line, along with that second card's regular monthly payment.

Here's an example of what I'm talking about. Let's say you have 3 credit cards and 3 credit payments each month:

• Card #1 - $ 1,000 balance and a $20 regular monthly payment.
• Card #2 - $ 2,500 balance and a $50 regular monthly payment
• Card #3 - $ 3,500 balance and a $75 regular monthly payment

In the first few months, you would pay all the minimum regular monthly payments on all three cards. Because you're now controlling your spending, you will have some more money each month to pay in addition to the regular monthly payments on all 3 credit cards. After a time of regular payments, Card #1 is paid in full. The very next month, take the amount you were paying on Card #1 and apply that to Card #2 in addition to the regular monthly payment. Soon, Card #2 will be paid in full. When that happens, take the payments made to Cards #1 and #2, and apply both amounts to Card #3. Follow this simple process and your credit cards will be paid off sooner than you think.

Last Steps on Your Road to Freedom From Credit Payments

Get in touch with one of the three credit reporting bureaus and get a copy of your credit report.. After Sep 1, federal law mandates that every U.S. consumer be provided with one free credit report each year. You can get yours by going to the Free Credit Report link at the end on the links section of this Hub. Once you have your credit report, it's time to start studying it and getting rid of any unverifiable errors. Most folks have a few of these on their credit report.

Try to remember that rebuilding a credit history, getting a better credit score, taking care of all the things that affect credit, and working at a plan to cleanup credit is going to take a lot of time and concentrated effort. Changes in your score will not happen overnight. Work on paying off all you can quickly, make credit payments on time, get rid of all negative and unverifiable info on your credit report, make good on any old accounts that may have some missing or late credit payments, and start to establish new credit accounts wherever possible. As you begin the process to cleanup credit, you will find your credit history restored and your score begin to go back up.

There are some additional links below if you need more assitance. Good luck!

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