The three major credit bureaus maintained detailed account of all your financial and credit activities and draw a report based on their information. Your credit report is the most important document for getting any kind of credit, loan or mortgage. Based on the information in the credit report, your credit score is calculated, and based on this score, a lender will decide whether you qualify for a loan, and the interest you will be paying on it. Also credit reports are scrutinised by employers, utility services and companies to find out if you are a good potential customer. So it is imperative to have a good credit report and if it is not great you should take steps to clean up your credit report.
There are many ways you can clean credit report up. First of all get your free copy of credit report and read it thoroughly. Pick out and adverse information which is more than seven years old. Adverse information can be late payments, lawsuits, tax liens, convictions and so on. If it is more than seven years old, then it should not be appearing in your credit report. You can take steps to have it removed by contacting the bureau. However there are certain adverse information which can be reported for more than seven years like government insured student loans.
Read you credit report carefully and pick out any mistakes in your name, and contact details. If there are any bankruptcy filings make sure that the chapter number is correctly mentioned. Pick out all account history that is reported wrong and open accounts which you have closed by paying it fully. So the first step to clean credit report up, is to get all the wrong information removed. This may take time and if the bureau disagrees with you, then you can go directly to the creditor and ask him to again give the correct information to the bureau.
The next step to clean credit report up, is to build some favourable information in your report. This can be done by reducing your loan amounts by budgeting yourself and limiting your spendings. Always pay your instalments on time and try to settle off more than the minimum payment. If you are finding it difficult to manage certain debt payments you can discuss them with your creditors and work out a way where you can make lower payments regularly. Once you have negotiated you will have to stick to the repayment plan or it will not show favourably in your credit report.