You would have to live under a rock to not know that the credit crunch has caused lenders to tighten their guidelines. Having a good credit score is more valuable than ever and is essential if you hope to qualify for a home loan or get a good rate on a car loan or credit card.

If you have bad credit, you may have no idea how to fix credit. While fixing bad credit isn’t easy, it can be done!

The first thing you need to do it to understand that fixing credit fast is not always possible. Yes, there are things you can to do to improve your credit score quickly. If your credit score is already good, this may be enough to give you the edge to qualify.

For people who truly need credit restoration, the process will take time, patience and perseverance.

The first thing you will need to do is get a copy of your credit report. There are numerous websites that you can do this from.

Every American is entitled to a free credit report from each of the three major credit bureaus under the Federal Fair and Accurate Credit Transactions (FACTA) Act of 2003.

It is important to know that your free report does not include your credit score. If having your credit score isn’t important to you, you can get a free credit report at AnnualCreditReport.Com http://www.annualcreditreport.com.

If you are going to pay to get your credit score, make sure that you read the fine print, because very often you are subscribing to a monthly monitoring service. These services can be a good thing if you are serious about credit repair, but it is important to understand what you are getting. Many of the services will also offer useful tools like credit score predictors that allow you to estimate what will happen to your credit score if you take specific actions.

Your credit report has several parts.  They are:

• personal information
• credit summary
• public records
• credit history
• inquiries
• creditor information
• your credit score

Ideally, you can print out your credit report and sit down with a highlighter and go through it line by line. You will want to examine your personal information, credit summary, public records, credit history and inquires very carefully.  Make note of any errors and any thing that might be “questionable” that you would like to dispute.

Once you have your list, you are ready to begin fixing bad credit!  You will want to select three or four items to dispute initially.  It is important not to dispute too many items at once, or your disputes can be disregarded as frivolous. 

Ideally, you will select items that are most likely to have an impact on your credit score that are likely to be corrected.  Examples of this would be errors that you have documented and older accounts that are paid.  (Lenders are less likely to have access to their records and may not take the time to verify them.)

Once you have selected your initial disputes, you will write a letter to the credit bureaus stating your dispute.  Make sure you include your personal information in your dispute as well as any documentation that you might have.  Send your dispute to each of the three credit bureaus via certified mail.  This might seem like a waste of funds, but verifying the that you have sent this letter may be essential later if you are forced to resort to more advanced methods.

Once the credit bureaus have your disputes, the lenders have 30 days with which to respond.  They will verify the debt as accurate, agree that the debt should be removed or fail to respond.  If they fail to respond, the debt must be removed from your credit file.