Here is STEP 1: Read your credit report to discover what things are listed on the report that have led to your bad credit rating in the first place.
STEP 2: If you note inaccuracies on your credit report, you’ll need to dispute those with the individual creditors reporting them. You can’t dispute accurate information even if it does reflect poorly on your credit report, but you can make repairs and improve your credit.
STEP 3: Contact individual creditors and ask if they’re willing to work with you to create a repayment plan you can afford, but also assures the creditor of your intent to repay the debt owed them.
STEP 4: Contact your credit card companies and ask for a reduction in the interest rate applied to your credit cards. Some may not be willing, but many credit card companies are willing to do so for cardholders. Use the reduction of interest applied to a credit card account to pay the debt you have on it down faster.
STEP 5: Gather pay stubs and statements for monthly, quarterly, and annual bills (utilities, phone, mortgage, home insurance, retirement account contributions) and create a budget to keep from spending beyond what you actually bring in. You’ll also find ways to spend less and use those savings to pay on the debts causing you bad credit
STEP 6: Maxed-out credit cards? Barely able to make the minimum payments on them? Stop using them! Hide them away in a drawer so they won’t tempt you to use them and add even more debts to them.
STEP 7: Contact a credit counseling service if your debts are so large that you cannot make regular payments on all of them. A credit counseling service can help you create a plan of action to take care of the debts that are responsible for your bad credit. They can often times speak to your creditors and get you reduced rates and extended payments plans as well.
STEP 8: Apply for a bank sponsored debit or prepaid credit card. As you use this for purchases and make regular payments, you will slowly rebuild bad credit into good credit.
No matter how bad a credit problem may be, it can either get better or worse. In many cases much, much worse. Almost everyone has had credit issues at one time or another in their lifetime. The fact is that our credit rating has a very large effect on our every day lives. Always remember that the better your credit becomes the more money you can and most certainly will save on a variety of things such as; mortgage rates, credit card interest, car payments to name but a few.
Stick to a budget and both you and your credit will be happier for it. Good luck.