It could happen to you. You are in the market for a new car and things are progressing smoothly during the negotiations when suddenly you are hit with, "I'm sorry, but there are a number blemishes on your credit report. We aren't going to be able to approve your loan at this time." As heart wrenching as this is, don't despair. With some knowledge and tenacity, you can actually fix your credit score.
First, order a copy of your credit report. You need to identify the areas that are holding you back. It's best to order reports from all three credit bureaus; Equifax, TransUnion and Experian. You can order a credit report from each bureau for free once a year.
Keep in mind that you are responsible to ensure that your credit report is up to date. Clearly identify each mistake and state why it's wrong. Sometimes it's necessary to contact your creditors to resolve mistakes
Once a negative item is removed from your report, the credit bureau cannot put it back on unless a creditor verifies its accuracy and completeness -- and sends you written notice.
Next you should create a budget for yourself that will ensure that you will eliminate debt that may have gotten you the poor credit report in the first place. Work with your creditors to fix bad credit. This might include arranging new payment plans with credit card companies, and loans. Most lenders are more than willing to work with you. They understand that it's better to receive a portion of a debt than nothing at all.
As you begin to get your credit score fixed, add positive information to your credit report. You may have been denied credit because of an insufficient credit file, yet you have credit. Find them and ask them to report your positive credit to the credit bureaus. Not all will do that. So, in the future, before opening a new account, ask if on-time payments will be reported monthly to a credit-reporting agency.
Lastly, open a savings account at your bank. This shows creditors that you are working to save and that you have reserves to repay debts.