Clean Up Your Credit Report

• Order a copy of your credit report from the three major credit bureaus: Equifax, TransUnion and Experian. You can get a free copy of each report through the Annual Credit Report website. Check each report for inaccuracies. Dispute any inaccurate information with the credit bureau by writing a letter stating why you dispute the information. Pay off any outstanding debts on accurate listings. While paying off a debt will not remove the negative listing from your credit report, lowering your debt will increase your credit score.
  
  

Open New Accounts

• You must open credit accounts and use them to rebuild new credit. If you have severely damaged credit, you may need to open a secured credit card. With a secured credit card, you will put funds into an account. The creditor will then use those funds to extend you credit. Typically, your credit limit will equal the amount of funds you put in the account. The creditor will report the activity on the secured card to the major credit bureaus. You can also open retail cards or gas cards. A small personal loan will help you get a mix of credit and improve your credit scores.
  
  

Manage Responsibly

• Pay all of your bills each month by the due date. Paying your bills on time will help build positive credit. Do not overspend on your new credit card accounts. Try to pay the full amount due each month. If you do not pay the full amount due, keep the overall balance on the credit card account low. Carrying a high balance, or maxing out the card entirely, will hurt your credit score.
  
  

Warnings

• Do not apply for several accounts at once and do not open more credit accounts than you can handle. Submitting several applications will lower your credit score as the credit bureaus consider the number of recent inquiries you made. Do not open any accounts that you cannot afford. Falling behind on your payments or racking up too much unpaid debt will lower your credit score.