How to clean up your credit file

The first step you must take to clean up your credit file is to get a copy of your credit report from each of the three main credit reporting bureaus.

Look at your credit report and identify those entries that are negative - the entries that show current debt where your payment record has not been good. These are the ones you need to improve on.

The first step is to get up-to-date with any overdue payments. This is a must. Your credit file will show little improvement all the while you are in arrears on any current credit arrangements.

When you have brought all your accounts back into line, the next step is to ensure that all your current payments are made promptly each month from hereon.. If a payment is due by a certain date, make sure it is. And allow enough time for the payment to clear through the banking system and show in your account before the due date.

If possible get another credit card, or a store card even, and make a series of modest purchases each month which you pay off in full each month - this is important. By so doing you are demonstrating a new ability to pay back borrowings on time. It goes without saying that this only works, if you continue to pay all your other monthly commitments on time as well.

You should also bear in mind that this discipline extends to your other regular commitments, and not just to borrowings. Your monthly or quarterly bills for telephone, gas and electricity for example, all need to be paid promptly. Wait for the red reminder bill before paying and you are undoing some of the good achieved with your debt repayments.

By making payments either before, or when they are due, you will clean up your credit file naturally.

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