Dealing with bad debt is never easy, but it is possible. With a little hard work and some dedication to getting things back on track, it can be done. One of the first places to start is to take a look at your current accounts.

With late fees or overdraft fees, you can run into some serious problems that tend to overflow into more debt and poor financial decisions. Check out MoneySupermarket.com to make sure that you are getting the best checking and savings account for someone looking to repair a credit rating.

Get a Copy of Your Credit Report

Coming face to face with your credit report and your credit rating can make you take a step back. One number makes a pretty big difference when it comes to applying for credit, taking out a loan and even arranging for home or car insurance. The only way to begin the repair is to realize where you are now and where you want to be.

Look over everything listed on the report and figure out where things went wrong. Do you have too much debt? Are you missing payments or consistently making late payments? Whatever you see on the credit report that is causing a poor rating is the first thing that needs to be addressed. If there are incorrect charges or lines of credit, talk to someone about the possibility of identity theft.

Clean Up the Report

Get rid of any credit cards that you are no longer using and do not have a balance on. Even if these cards carry no debt, to a potential creditor, they look like an opportunity for you to spend and overextend yourself financially. When you call and cancel, changes to your credit rating won’t happen overnight, but you will be taking a step in the right direction.

Consistent late fees will be mentioned on a credit report and negatively affect your credit rating. Start by getting caught up on all of your payments. You don’t want anything to be past due. Once everything is current, you can begin to make payments on time and begin reversing your rating. The longer you show a consistent streak of payments made on time, the better off your credit report will be.

Get Payments Under Control

Once you are caught up, you have the opportunity to turn over a new leaf. By making all payments on time, you begin to slowly improve your credit score. The payments that need to be made consistently and on time aren’t just credit card payments. Even your utilities or cell phone bills should be current and paid on time. Your home mortgage needs to be consistently paid and up to date.

There are some things that you just can’t change. There are debts and defaults that tend to stay on your credit report for an extended amount of time. While this can be frustrating, it is important to note that the most recent six months of credit activity is what many lenders focus on. Everyone makes mistakes, but when you show a marked improvement over the past few months, you are on way to repairing your credit rating.