However, if you had not been aware of the theft, you will really have to work hard in order to do credit repair on your badly damaged credit.

Improving your credit

In order to improve your credit after being a victim of identity theft, you will be required to work hard on your credit. So, what are the necessary steps that you will be required to take in order to improve your credit?

Irrespective of when you come to know about the identity theft, you will have to let the credit bureaus and your creditors know that you have been the victim of the theft. The main thing that you will be required to do is put a fraud alert on your credit reports.

You will have to send letters to the credit bureaus and the creditors through certified mail returning a return receipt, regarding the theft. You will have to mention that you are trying to clear off the mess created by the identity thieves and so you too need cooperation from them. You will have to work on disputing the wrong listings on your credit reports. This is going to lower most of the diet levels and thus you may be able to get rid of most of the debt which might have built up due to the theft; if not all.

Then, if you are able to find out that there are any such debts or account which you have never opened, you will have to contact those financial institutions. You will have to send them proof of the complaint that you have filed. This will help you prove that you have not incurred these debts and that you have never applied for the account. This further can help you in lowering the amount of your debt as much as possible.

Then, depending on the debts that you have not been able to discharge through disputes, you will be required to work towards paying off the remaining dues. So, you will now have to prioritize all of your debt payments as per the requirements. This will help you to minimize the debts one after another. You will also be able to improve your credit if you pay off your debts. This is because, your payment history accounts for 35% of your credit score.

In addition to this, you will also have to follow various other strategies too in order to improve your credit. You can try to take out a secured credit card as these are available easily enough; even if you have bad credit. The secured credit cards have a slightly low interest rate in comparison to the unsecured credit cards. So, you can use this secured credit card to buy items as per your requirements. Then, you will have to make the payments on the card within the specified time. This can help you a lot towards bettering your credit with time.

In addition, from now on you will have to be careful about the people with whom you are sharing your personal information. You will have to keep a close watch on the credit reports and avoid losing your wallet containing cards and any other information.

What can you do to get rid of bad credit?

There are various ways which you can adopt to repair your credit scores.

1. Review your credit report – This is the first and one of the most important steps in credit repair. You should collect the credits reports from the three major credit bureaus and examine them closely. It may happen that there might be a negative item that is incorrect. These things usually happen if your creditors provide wrong reporting to the credit bureaus or if there is a printing mistake. You should dispute these negative items immediately as having these removed can improve your credit scores.

2. Pay your credit card balances on time – The factor that influences your credit score the most is your repayment schedule. If you become delinquent on your loan, then your credit scores will be affected negatively. You should take care to make at least the minimum monthly payments each month to ensure a steady repayment of your debts.

3. Take a consolidation loan – You can also take a consolidation loan to pay back your multiple debts if you find it difficult to keep a track of all of them and make the monthly payments. You can take such a loan either from a bank or from any family member. Clearing your debts will have a positive impact on your credit score. However, you should remember to pay back this new consolidation loan on time, by making regular monthly payments to maintain a good credit score.

4. Take out a new credit card – Though thus suggestion might seem absurd to you but taking out a new credit card and paying back the balances on time helps in credit repair process. When you are able to show that you can handle a loan properly it reflects positively on your credit report.

You can take the above 4 steps to facilitate your credit repair process and improve your credit scores.

Create a Personal Spending Plan.

An expenditure schedule will allow you to design your very own unique approach. This could very well be the most significant step for graduates who have depended upon their families or personal loans to pay their way through college. As you may have heard, America is a country of big spenders, and we can fork out cash without even thinking about it. Commence your plan by measuring your expenses. Take note of everything you pay for using cash, debit and credit cards, for a minimum of two weeks. A good number of grads will uncover at least one thing they didn’t realize they were spending so much on. Just by jotting it down will probably discourage you from continuing to do so.

Get Rid of Credit Card Debt.

Sadly, far too many students finish college with mounds of debt tied to their credit cards. To keep this problem from continuing to arise, avoid using your credit cards altogether. Take them out of your wallets, and bury them deep in your desks. This will ensure that you think twice prior to using them frivolously. Be exceedingly vigilant and issue payments each month. Developing good credit is essential, and if you make regular payments, you’re on your way to doing so.

Understand How Scores are Calculated.

Think of your FICO score as your personal finance report card, and your grade will impact your financial future. Just about everybody will take your scores into consideration, including insurance agencies, apartment landlords, utilities, and even that nice lady in human resources at your potential workplace. You are permitted to demand your credit reports for free once a year from the big three primary credit bureaus of Experian, Equifax, and Transunion. The loftier your FICO score, the lower your perceived risk will be by those interested. Scores generally vary from 300 to 850.

Save, Save, Save.

As a recent grad, planning for your retirement appears to be to be a lifetime off. Eliminate the word early retirement from your vocab and swap it with personal self-reliance.

Prior to the credit crisis, getting a low rate on your credit cards was relatively easy. Lenders provided great deals on balance transfers, and all you had to do was simply threaten to switch providers if they didn’t cut you a deal. It’s possible that as a recent grad, you will never experience the loose lending that took place towards the end of the last decade.  Watch your spending, monitor your credit scores, and if you prove to be responsible, you just might get a great deal anyway.