Bad or marginal credit today has become commonplace. It doesn’t mean the person is bad, since bad credit can occur due to sudden unprepared illness or emergency, a job layoff, etc. Many people don’t have adequate savings to overcome a severe and expensive emergency or job loss. Research indicates many families are barely separated from bankruptcy by a thin line, implying the gravity of situation. To prevent this, cut out all unwanted expenses.
The initial step a person with bad credit should take is to know the actual amount of your credit. You may have seen only a single credit report or just been informed about what is placed on record by your bank or loan manager or finance manager. But are you aware there are actually 3 different credit-reporting agencies and every one has a different report and score? Simply because one credit report shows you in poor light doesn’t necessarily means the others too do. On the contrary, if one is positive, the others may be just the opposite. As a rule of thumb, they are equivalent, but negative items or entries do remain longer on some then others while others make more mistakes while recording the entries.
Search for any of the 3 major credit bureaus (simply google the names of Experian, Equifax, and Transunion) and pay to get all 3 reports in a single report along with your credit score. Take all 3 since they are quite likely to be slightly different. The report is necessary to help you actually measure and understand exactly how bad your situation is and the steps required to better and repair it. Price of all 3 in a single report is nearly $40 to $50, but worth it. Free reports that you can get according to latest federal laws will only be provided by a single credit bureau but without score. This makes it very difficult to know your position unless you work in an influential position in credit institution.
For score 600 and higher your credit is average, but not bad. There is not much to repair. For score 500 or below, you mostly will have plenty of negative entries, mostly tax liens, judgments, repos (car repossessions), a likely bankruptcy, and/or other serious damaging records and entries in your reports. A low or bad credit score requires a lot of work and effort, but you can still increase your credit rating very quickly.
Once you get your credit report and scores, find out the most important credit reporting bureau for your part of the country (every bureau has a specific area of influence). The simplest thing to do is to talk to your local new car dealer and find out from the finance manager which credit report they normally use to establish credit. Generally it is only one and it is the one that will be most influential in your location and the first one you should mend.