Many people who are faced with bad credit often feel helpless in alleviating the damage done to their financial reputation.  Your credit score and report are analyzed in almost every major milestone in life, including approval for car loans, mortgages, leases, and even certain jobs. 

However, by taking action with some simple steps, you can certainly turnaround your credit and repair your FICO score quickly.  Financial experts recommend that you should begin repairing your credit score at least three months before applying for a loan.
When you take the following DIY actions, you will be pleasantly surprised at the improvement in your credit score.

Order your credit report

Many people with bad credit neglect to face the reality of their credit report and score.  Denial is one of the worst actions you can take in your financial life.  Regardless of how poor or great your credit score is, it is critical to be continuously aware of your financial details. 

Once a year, you can order a free credit report from all three reporting agencies through www.annualcreditreport.com, which is jointly run by TransUnion, Experian, and Equifax.  However, if you want to improve your credit, it is recommended that you check your credit report each financial quarter.    

By reviewing your credit report several times a year, you can precisely gauge the improvements in your credit score.  Once your credit score becomes high enough, you can apply for an auto loan or a home loan and obtain competitive interest rates.

Check for discrepancies

Once you obtain your credit report, it is critical to check for inaccuracies.  First, evaluate your personal information, such as your name, address, and workplace.  If you notice any new address that does not belong to you, this could be a warning sign of identity theft.  Regardless of how bad your credit is, it is important to protect yourself against identity theft, and you should report these discrepancies to the credit bureaus and police immediately. 

The next step is for you to review each line item on your credit report.  Make note of any items that are incorrect, such as an account that does not belong to you, a balance higher than what you think you owe, or a closed account that remains open on your credit report. 

Dispute inaccurate or old accounts

If you find inaccurate items on your credit report, or old accounts that no longer exist, it is important to dispute this information with the credit bureaus.  By law, the credit bureaus are burdened with the responsibility of evidence, and therefore, if the creditors cannot find evidence to support the financial reporting, the item is automatically removed from your report.  The sooner you can have inaccurate information removed from your credit report, the better your FICO score will become. 

Negotiate repayment terms

Did you know that some creditors will negotiate the balance with you?  Most people are unaware that creditors and lenders are generally willing to negotiate monthly payment amounts, as well as the interest charged. Often, companies would rather take the certainty of a lower amount versus never getting paid at all. Many companies will allow you to cut the payment in half, defer a number of payments, or be put on a special budget program.  Of course, negotiating your outstanding credit amounts can adversely affect you credit ratings, but not as harshly as default.

The greatest step you can take to improving your credit score is by taking immediate action.  For example, if you know that you will not be able to make your minimum payment, or if you need to defer a payment, it is crucial that you call your lender immediately.  Most companies are more than willing to work with their clients.

Your credit report and score are critical factors to your financial reputation, which can impact the home you live in and the job that you obtain.  By becoming proactive and taking the necessary steps, you can quickly improve your credit score.  Remember good credit is a lifelong process.