Your credit is part of your identity. It doesn’t matter if it is a car loan, house loan, or just a department store credit card. If you want a credit line your current and past credit is going to effect you. Not to mention how pesky debt collectors can be. Here are some ways to help yourself repair, or prevent, a bad credit report.

First and foremost you must be your own advocate! You won’t know if there is a problem to fix if you don’t check the your credit reports. Comb through the credit report and look for any discrepancies. According to federal law, each individual is entitled to one report from each of the three main credit agencies each year. The three agencies being Equifax, Experian, and Trans Union. If you haven’t gotten a report in the past year then don’t pay for any credit reporting service. There are a lot of scams out there which can be detrimental to someone with shaky credit to begin with.

Next, you must manage your spending very closely. In order to not go into further debt and worsen your credit score it is important to watch what you spend. Typically, cutting out frivolous spending may be the best way to go about this. Even consider setting a spending limit per day, week, or month. Beyond your bills, you should be aware of how much you are spending on entertainment related features. Many banks or credit cards have spending analyzers too which can help you determine where all your money is going.

Now that you have your spending under control the next step is to begin paying off your debt. Paying off your debt is the quickest way to get your credit back in good standing. Since you have already cut out frivolous spending, there should be extra funds available in order to put toward your debt. Whenever possible try to pay above the minimum payment on your credit cards. Paying the minimum amount will eventually cost you more. Especially since the interest rates on some cards will be so high, especially if you are a credit risk.

Paying your bills on time is essential when repairing your credit. If you are unable to afford the monthly payments sent forth by your creditor then contacting your creditors should be your next step. Most creditors will work with their customers by lowering monthly payments and at times even deferring payments. Basically, the worst thing you can do is ignore the situation because even if you don’t pay your bills they will still be there. In the case that you are able to lower your monthly payments, always make sure you get any agreements in writing.

Try to avoid filing for bankruptcy. Unless it is absolutely necessary filing for bankruptcy will kill your credit score faster than anything out there. It will stay on your credit report for ten years and any potential creditor will be wary of your inability to manage your funds. Though it may be the easy way out, it will be detrimental in the long run.

Don’t close all your credit accounts when you are trying to rebuild your credit. If you need to cut up your cards then that is OK but closing down all your cards at once will be bad for your credit score. Having cards open shows that you can manage your credit and future creditors like to see this. It is recommended that you have an average of three credit cards open. If you don’t have any credit cards open then, though it may sound counter productive, consider opening a line of credit to show that you are responsible with money.

If you plan on getting loans, such as auto or home loans, in the future and have been a victim of bad credit you should consider joining a credit union. Joining a credit union will benefit you in the future because it will be easier to acquire a loan.

Bad credit doesn’t have to be that scary. It is something that, with hard work determination, can be fixed in time. The steps listed above will, in time, get you back to the world of good credit.