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If you are like the millions of other Americans who have damaged credit, you may be wondering what you need to do to fix it. There are all sorts of schemes out there that say they can repair your credit in a jiffy, but in all actuality, you can do it yourself, and it will cost you nothing. Not everyone needs to hire a credit repair company to raise their credit score but if your situation requires it there’s nothing wrong with it. However here are a few ways that you can begin to repair your credit and get yourself out of debt.

Set A Budget and Stick With It

One of the first ways to repair your credit is by changing your spending habits. It really doesn’t do any good to get credit cards to pay off other credit cards and compounding interest with consolidation loans. You must learn how to manage your money. Speak with a financial advisor, or get someone who can help you if your money management skills are lacking. Finally, don’t depend on credit cards to get you from payday to payday. Allow yourself a certain amount to spend, when you exhaust that amount, you are done. Change your idea that if you run out of cash there is always plastic to back you up. To clean up your credit, you will need to change the way you handle things.

Get Copies of Your Credit Report

Now that you have a new mindset, it is time to tackle those credit reports. The three major reporting bureaus are Equifax, Transunion, and Experian. Each of these companies are required by law to give you a copy of your credit report annually. Additionally, if you have been recently denied credit, you can also get a copy of your report for free.

Go through your reports and look for any errors. Remember, the lenders and companies that report to the bureau can make mistakes too. You can dispute any information that is on your report that you don’t feel is correct. Simply fill out a dispute form, and the agency will contact the company in question. The company will have 30 days to respond to the request. If they don’t respond to verify that the debt is valid, the bureau is required to remove it from your report. Now keep in mind, many companies do not respond because the debt has been sold several times or it sits on someone’s desk. This works in your favor in many cases. However, if they do respond to the request, and they can prove the validity of the debt, you will be stuck with it.

Take Extra Money To Tackle Debts

The best way to tackle your debts is to do it one at a time. Let’s assume that you go to a gourmet coffee shop every morning. That $5.00 that you spend on a coffee can really add up. If you work 5 days, then that is an extra $25 dollars you spend on coffee each week. That is $100 a month, and $1,300 a year. No one is suggesting that you go without coffee, but you can buy a machine and a mug to keep it warm and save yourself a ton of money. This is just one aspect of your life, how many other things can you forgo to pay on your debt?

Pay Down Credit Cards

To maximize your credit, you want to make sure that you pay your credit cards down to about 25 percent of the balance. If you have a limit of $1,000, you don’t want to carry a balance of more than $250 at any time. The credit card can work for you if you have your balances in check. If you have a balance too high or a card that is maxed out, you are killing your FICO score.

Don’t Get Any New Credit or Inquiries on Your Report

When you are in the process of repairing your credit, you want to make sure that you don’t do anything that will further damage your rating. Every time you apply for insurance, credit cards, jobs, or other things that need to check your credit, it goes as an inquiry on your report. These inquiries add up, and they can have a negative impact on your score. Don’t take out any new credit, and don’t apply for anything. While you are trying to clean up a report, you need to make sure that you are doing everything possible to make the score higher not lower. With a little work you can clean up your report and have a stellar rating.