Step 1 - Getting a Credit Report
The first thing you'll need to do is get a copy of your credit report. When you request a credit report, make sure the report includes information from the three major credit bureaus: Equifax, Trans Union, and Experian. These bureas provide one free credit report per person per year. You can order three credit reports - one from each bureau - or you can use a third party to order the three reports all together.

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Once you receive your credit report, make sure that all three bureaus have an accurate report to supply to lenders. A credit report will tell you the exact reasons why you have bad credit. You never know - it may be due to something as simple as an error. So when you receive the copies of your credit report, go over them very carefully. You should check the following for each listed account:

• Are all of the accounts listed are actually yours? If not, they need to be removed from your report.
• Is the status of the account (as far as whether it is open or closed) correct? If not, it needs to be corrected.
• Are all reported balances accurate? If not, they need to be corrected.
• Is your personal information such as name, social security number, address, etc. correct? If not, have it corrected.

If there are errors on the report, fill out the form included with the copy of your report and send it in. The credit bureau is required by law to investigate your claim, so include as much information as possible. Send any related account summaries or letters that would pertain to the issue. Be sure to send copies and keep the originals for your own records. Once the credit bureau investigates your claim they will either correct the error or they will decide that the report is accurate as is. If this happens and you still believe the information on the report is wrong, send another letter to the bureau explaining exactly what happened with the situation in question. The credit bureau is then required to give a lender this information when they request your credit report.

Also, pay your bills on time. Lenders need to know that you will pay your bills on time. You like to receive your paycheck on time. Lenders like it too. Buy a calendar and write reminders for the dates corresponding with the due date of the monthly payment so that you don’t forget. Also keep records of all bills to make sure you've received all of the bills and one hasn’t gotten lost in the mail.

Allow for at least 7-10 days for the mail to be delivered time. If you receive a bill late and are worried that it will not make it through the mail on time, call the lender and try to pay by phone. It may also be possible to make a payment online at the lender’s web site. There may or may not be a fee for making a payment by phone or Internet, but feel free to ask.

If you are continuously late paying your bill because it doesn't match the times when you get paid, call the lender and see if they can change the billing schedule. A lot of lenders will be happy to work with you to help you pay your bills on time.

Keep in mind, though, that even though the company is guaranteed payment with the savings account, they will still charge interest and various fees. So read all of the fine print when applying for a secured credit card. But before anything else, the first thing you want to know when looking for a secured credit card is whether the company reports your payments to the credit bureau. If they don’t then the card won't help you rebuild your credit rating, which is the very reason for getting a secured credit card in the first place!

A credit card from a department store or a gasoline credit card may also help you improve your credit. These cards are usually easier to get than other credit cards, and some of them even have to be paid off every month because that makes it so there is less risk to the lender. But this is good for you, because paying your cards off consistently only helps you establish your good credit rating. Also, these types of cards are easier to get approved

Another way to reestablish your credit would be to take out a loan with a co-signer. A person with a good credit history can co-sign on a loan with you so that you will be approved for the loan. As you pay off the loan in regular, on-time monthly payments, your credit rating will improve. But remember that if you don't pay, it damages your co-signer's credit rating, which will also guarantee to damage your relationship with that person!

1. Examine your credit report for any errors and have them corrected.
2. Pay off your debt as quickly as possible and make your monhtly payments on time.
3. Re-establish your credit through the use of secured credit cards, gasoline credit cards, or department store credit cards. Also consider a co-signer.

Happy credit building!