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Bad credit debt has become rampant in this country, as many debtors fail to make good on their promises and abuse their purchasing power. It’s no wonder, then, that credit card debt reduction has become a multi-billion-dollar industry. What most Americans don’t know is that they can repair credit history and right their wrongs on their own. The first step is to honestly assess your situation by tallying all the incoming income and all the outgoing fixed/variable expenses. If your earnings are less than your expenses, then you have serious problems that may require a full restructuring of your life. Do you have a gas-guzzling SUV or an electricity-sucking air conditioner running all the time? You’ll likely have to sell any “money-pit items” and down-size your life a little bit. Hold a garage sale, move to a smaller place, conserve energy, shop around for better prices on medicine and opt for the bare bones cell phone/cable plans.

Secondly, you may want to negotiate with your creditors for a lower interest rate. While this won’t repair credit outright, it will certainly give you all the benefits you’re entitled to. If you have a credit score of 720 or higher, then you should have no problem finding a card with 0-5% interest rate for at least the first year. You can compare credit card offers at www.cardratings.com. Remember that when you pay less interest, more of your monthly payment goes toward your balance. If you have shoddy credit, then you’ll have to settle for an interest rate no lower than 9.9%, yet keep in mind that if you pay your balance in full each month, you won’t have to pay any interest at all. Making timely, complete payments on an unsecured credit card is one of the best ways for people with bad credit to create a new, positive payment history.

The third way to repair credit history is to start a fresh history of good credit. A leading credit repair Attorney says that a healthy credit portfolio includes both the unsecured credit card and secured loans, like an auto, home equity, mortgage or student loan. On average, most people have two or three credit cards they use regularly. Your balance should never be more than 30% of the maximum credit offered and should be paid in full and of course, on time each month. While past mistakes will stay on your credit file for 7 years, the good news is that the past 48 months are the important ones, so within a year you’ll see large improvements if you keep up with all your payments. Some people take out self-financed loans by taking $1,000 out of their savings and repaying themselves each month, while the bank reports all these timely payments as good credit history to the bureaus.

Lastly, you can repair credit by finding errors in your credit report. Did you know that 40% of all credit reports contain inaccuracies? First look at all the dates of the items. Nothing should go beyond 7 years. Next, look at the status and see if paid accounts are still listed as paid or if there are multiple listings for the same debt. By law, you can ask that this be amended to reflect one credit blemish, rather than several (as a result of moving from a closed account to several collection agencies). Sometimes, an account may appear that is not even yours. Once you dispute these claims, either online through www.annualcreditreport.com or through the mail, the creditors must defend the claims using supporting evidence or your report will be amended to your version of the truth. This can improve your credit overnight and is as close to a miraculous credit report repair as you can get!

If given the opportunity most people would choose to live free and clear of all bills. That includes a home mortgage, a new car and credit cards. There would be enough money each month so that they could put back towards retirement or education. In a perfect world everyone would have exactly what they wanted and needed. But this is not a perfect world. Most people rely on credit cards, loans and mortgages in order to live. These allow them to live the way they want but it also puts them in bad credit.

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