Unfortunately, there’s not an easy fix for bad credit. Repairing negative credit history takes time and patience, but there are several ways to get a jump start on the process.

Step 1: Check Your Credit Report

You are entitled to a free credit report each year and can request a copy at annualcreditreport.com. It’s important to obtain a report that pulls information from all three credit bureaus (Equifax, TransUnion, and Experian) because they can all indicate a different credit score. Creditors aren’t required to report to all three bureaus, and typically only report to the bureau with which they subscribe.

It’s essential to check your credit report each year to ensure it reflects accurate information. Be sure to check for erroneous late payments, and verify the information listed under the “amounts owed” field is correct. If you discover an error, dispute it with the credit bureau and reporting agency as soon as possible.

In addition to obtaining your annual credit report, you can also obtain credit scores year round at creditkarma.com. They typically aren’t scores used by lenders but should give you a general overview of your credit report’s current status.

Step 2: Set Up Payment Reminders

Making payments in a timely fashion is one of the largest contributions you can make to your credit score. Some financial institutions offer payment reminders via online banking, e-mail, and text alerts. Automatic payments can be set up if you have a really difficult time keeping up with due dates. But, keep in mind, this method doesn’t help instill a sense of money management with creditors because automatic payments only deduct the minimum payment due.

Step 3: Reduce Amounts Owed

Easier said than done, right? It’s worth the hard work and sacrifice because it’s far more satisfying to pay off debt completely than it is to improve your credit score.

A great debt reduction method:

Stop using credit cards.

Determine the amounts owed on each account you have open, as well as the interest rates associated with those accounts. Establish  a payment plan, and apply the majority of funds allotted for debt payments toward the highest interest accounts first.  Continue to pay the minimum amount due on your other accounts. Once the account with the highest interest rate is paid off, move on to the account with the second highest interest rate. Continue paying off debt using this method until all accounts have a zero balance.

Tip: Change payment due dates on several accounts if a large number are due around the same time.

Credit Score Facts

– Your payment history accounts for 35% of your calculated credit score.

– Paying off a debt will not remove it from your report; it stays there for 7 years.

– Delinquent payments–even one day late–majorly impact your FICO score.

– Amounts owed account for 30% of your calculated credit score.

– Keep balances low. Pay off debt rather than transferring or moving it around to other accounts.

– Don’t open new cards you don’t need just to increase your credit limit; it could backfire and lower your score instead.

– Don’t open multiple accounts within short time frames. A flood of new accounts look especially risky if you’re a new credit user. Apply for and open new accounts only as needed.

– In general, credit cards and installment loans will rebuild your credit score. An individual who doesn’t have any credit cards tends to be a higher risk than an individual who has credit cards and manages them responsibly.

– Adding an installment loan (personal, auto, mortgage, student), if you don’t already have one, shows you’re responsible with both major types of credit. If you choose to add an installment loan, make sure it reports to all three credit bureaus. You can find the best deals at a local bank or credit union.

Made a bad decision once or twice?
Most creditors look for patterns of payment rather than focusing on one-time or rare occurrences. So, don’t panic if you’ve had one or two slips in the past.

If you want to learn more about rebuilding your credit–radio host, Dave Ramsey, offers a lot of great advice on many different financial topics.