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How Do I Repair an Adverse Credit History?

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  • Written By: Alex Newth
  • Edited By: Angela B.
  • Last Modified Date: 28 August 2016
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An adverse credit history can haunt anyone trying to buy a car or house, and fixing their credit history is paramount to many people who have had a hard financial past. While it takes time, an adverse credit history can be repaired. Some of the obvious steps to repairing credit history are paying bills on time, keeping at least 70 percent of a credit card open, and paying any delinquent fees. Another factor that affects credit history is incorrect documentation, such as the credit history saying a bill was not paid when it really was, so ordering and checking your credit history is important. Even though bankruptcy and tax liens can ruin a credit history, and they cannot be directly taken off your credit report, it is still possible to repair your credit history.

Responsibly managing credit cards is the first step to repairing an adverse credit history. This means all bills must be paid on time. If there are any fees that cannot be paid on time, or are presently delinquent, they should be paid as soon as possible. All credit cards also should have about 70 percent of their credit line open, meaning that a $1,000 US Dollar (USD) credit card should have $700 USD open for use. If the credit card must be used and more than 30 percent of the total credit is needed, pay the amount down quickly to free up that 70 percent as soon as possible.

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Credit reports are usually correct, but a single error can make an adverse credit history look even worse. Common errors can include mention of defaults on loans, delinquent payments or going over a credit limit, even if you paid the proper amounts on time and did not go over your credit limit. It helps to order a credit history report, review all negative items, and then cross-reference them. If there are any incorrect items, you should call the credit card company and inform someone. Even if all the negative items are correct, you can reference your spending habits and find out exactly what is holding back your credit score.

Bankruptcies, tax liens, foreclosures and collections are devastating, even to those with excellent credit, especially since these items will not be removed from your credit history for years. While these items cannot be erased, showing that you are responsible with your credit will help reverse an adverse credit history. If getting a regular credit card is impossible, get a secured credit card, or one that requires collateral. Managing a regular or secured credit card responsibly will show credit bureaus that you are working to repair your adverse credit, and they will start raising your credit score.

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