Living with bad credit is not easy. If you have a history of bad debts, banks can turn you down for a mortgage or car loans, insurance companies can charge you more to get insurance for your vehicle, and you can even be required to put up a significant deposit before getting your gas or electricity turned on. Not to mention that some employers also pull your credit report before they choose to hire you.

Then there’s the inconvenience factor. Need to rent a car? Lots of luck without having a major credit card. Need a replacement car for your old clunker? It’s not impossible to get financing for a used or even new car, but you’ll pay a pretty penny in monthly interest charges. The same goes for buying a home. There are firms and individuals who will lend you the money, but not banks, who were affected by the mortgage loan debacles of the 2000s.

Here are several tips for repairing your bad credit:

Get your free credit report

By law, you are allowed to get a free copy of your credit report. But beware of fraudulent websites that seem to offer you a credit report, only till later do you realize they do in fact charge. If you want your 100 per cent free credit report guaranteed by law, you need to instruct your browser to go to

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What if you own a business

Credit affects businesses too. And when a business needs a new piece of equipment, needs to relocate to a better area of town, often banks have very tight policies on business loans. To avoid dipping into your personal credit allow you to borrow on your invoices, in order to free up needed capital for improvements. This form of borrowing on your invoices is called debtor factoring. It helps in reducing the cash cycle as it enables businesses to release their cash invoices. Ultimately, debtor factoring accelerates growth. However, there are other such resources that help in controlling cash flows.

Consider paying for all three credit reports

The three major credit rating companies are Experion, Equifax, and TransUnion. If you are mystified why you got turned down for a loan, chances are, one of the companies rated you differently than the other two. Find out why?

Dispute any errors on your account

Errors, such as a company reporting a charge-off that you in fact paid, and in a timely manner, do occur on credit reports. Or maybe the company even has you confused with someone else with the same name. Be sure to challenge any errors, in writing. When you order a credit report, there are instructions on how to dispute errors. You also have the legal right to challenge errors reported on your credit report, direct to the company involved. By law, they are also required to investigate their original information.

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And after having the error cleared, the credit rating company should not only issue you a new credit report but also notify the other two of a successful resolution of an item on your original report.

Pay-off or make current any delinquent debts

If a debt is under 180 days old, you can either start making pay payments or even better yet, pay off an account in its entirety. Your payment history makes up a little over one-third of your FICO score, so any accounts you can make current or pay-off will significantly affect your score.

Pay-off charged-off accounts

Although they can continue to show up on your credit history for several years, paying off charged-off accounts can open up new opportunities to get credit, where they were previously closed. Your credit reports will reflect that you paid off the charged-off account. Also, it might be possible for you to negotiate with the company you owe debts with to accept a lesser sum, than the total to clear off the entire amount. Figuring some money is better than none, and knowing how expensive lawsuits are, chances are they will go for it.

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Bring high balance accounts down

Your credit utilization makes up another significant chunk of your Fico credit score. If you have one or two credit card accounts that are heavily leveraged, try to bring those down. They are costing you not only plenty of interest but points on your credit score.

Try to bring loan balances down

Even if you have been paying on time if you borrowed $2,000 through purchases on a credit card and three years later, your balance is $1900, this is costing you valuable points on your credit score.

Focus on getting past due accounts in control first

Chances are, you only have a limited amount of money to dedicate to debt control. Therefore, prioritize and do your best to keep any future accounts from falling into past-due status.