When you clean your credit this can be a scary proposition, especially when you have no clue as to what direction to take from the start. A financial plan is necessary once you have committed to paying off debt, adding good accounts and disputing the information which is incorrectly added to your credit report.  Taking the time to set a plan of action for the good of your financial health, in an effort to avoid getting yourself into the same financial mess in the future, is an excellent move.

This plan can be as simple as obtaining counseling around spending and money management tactics, or maybe something a bit more intense such as hiring a money manager or possibly freezing your credit cards for the time being. Right now it is a great idea to start thinking about methods which will get you into a habit and practice of spending smart and efficiently.

The money you work hard to earn each day needs to be respected, and I don’t mean in a spiritual way such as chanting for the good of money. Respect it in such a way you are not being wasteful, you should be able to enjoy life with it, within reason. There is an old saying “A fool and his money are soon parted” – don’t be a fool, use your money wisely.

As we have said before in other articles, many people often find themselves living beyond their means and as a result find it hard to reel back in, after a financial crisis hits.  Changing your financial habits is sort of like dieting, if you deprive yourself of no spending, you are prone to failure as you will go crazy and over spend when you get some extra money. You need to make sure you keep grounded with some good common sense and follow a path somewhere in the middle.

As you are working through your plan of action to pay off your debts in full, as well as other aspects of debt management, there should have been a point where you kept track of your daily spending. It is a good idea to bring that information forward so you can see where your money was going, and how you could conserve and learn from that information to pay off your existing debt.

This report or list we are speaking of is called your spending plan, lets take another look at this with a different point of view. Part of the exercise that we put you through in another article was to use your spending plan to live by, living without any extras, basically in complete deprivation. Now is the time to find balance in your financial life. One of the objectives of this exercise was to have you build a more solid sense of what is important and what you could actually go without. As an example, do you really need to spend $7 every day on Tim Hortons or Star Bucks coffee when you are trying to improve your health. Of course not, as you are only sabotaging your health and still wasting money.

Forget about the fact we are using coffee as an example, no offense to the coffee drinkers, we are just trying to illustrate a point which hopefully you can relate to. Go back through your list and put an X by the things that were unnecessary. These things will also represent what you have learned to live without and then highlight the little things you missed. If the missed items are still a part of your monthly budget then you should now look for ways to cut them down a bit. As we mentioned one time before, if you find it hard to live without a salon visit for hair and nails, try this strategy:

Instead of going once a week, try going every two weeks. The one thing I have found in our family is stylists and nail technicians all understand ways to make your haircut and manicure last longer. Give it a try, take advantage of this and save a  little money -  after a few months have passed take note to see how well this strategy is working.

When we talk about how to clean your credit, it is important for you to know what areas of spending you can survive without and how to make your money stretch a bit further so you can live within your means. Once you get into this groove you can relax a little and continue on your journey toward a brighter financial future. It only takes a few little changes and a bit of self-discipline to find yourself on the way to starting new healthy spending habits and getting rid of the old costly ones. Continue on this path of success and always keep in the forefront your goals and desires of what you want to achieve, such as a Luxurious Mediterranean Cruise!

In order to clean your credit, it will take a lot of patience and commitment, as this task can be overwhelming and too much to handle for some of you. In order to make this task a bit easier there are a few simple ways that help to form the best results giving you the most efficient and accurate results as well as bringing you peace of mind.

One of the most important steps in cleaning up your credit is to review each of your credit reports and have any incorrect information properly corrected by the credit agency, right away. Not only will this particular strategy help to disclose identity theft, but it is vital to maintaining good credit. It is also very important when cleaning up your bad credit entries. It is good practice to obtain a credit report on yourself at least once per year and ensure you review the report with a fine tooth comb so to speak. Should you find any discrepancies don’t let them go, dispute anything you find to be incorrect immediately.

When we talk about credit agency we are referring to the three major credit reporting agencies Experian, Equifax and Trans-Union. Each agency has a web site available where you will find instructions on how to order and pay for your personal credit report. Of course there are websites in existence where you can order all three reports at once along with other services as well.

The only caution we give you is to be careful as there are sites out there which can be a bit shady, asking you to join as a member so you can get additional services at special prices. Once you join and they have your credit card information, they bill you each month and make it very difficult to cancel the membership. The best practice I recommend is to order and print your reports directly from the agencies website. Yes it is a bit inconvenient to have to go to three separate sites and maybe it will cost you a few bucks more however it is worth it in the long run.

At this point you should have your reports so why not take a few minutes to organize each one, staple them together in an effort to keep them from getting mixed up. Of course you will no doubt want to go through each one separately, and you will also want to compare the information between them so you can check for discrepancies. Find a comfortable place where you can concentrate without being interrupted, with a highlighter in hand and a pen to mark things which you may question, take your time and review the report entry by entry.

Most credit reports are separated into four different sections – personal information, residential address, employment details and credit accounts both open and closed. The main focus of a credit report is to give you details of all open and sometimes closed credit accounts, and the credit rating of each account. You also need to be aware of the name recorded, address and employment errors as this could be a sign of identity theft. After this take a close look at the accounts, collections, judgements which you have paid in full and make sure they are showing as paid in the report. If for some reason they are not showing as paid it is a good idea to have the agency investigate this on your behalf. Not only should you mark the items you feel are incorrect, but you should go through your financial records to locate receipts and other records of proof to confirm you did in fact pay off the balance of the account in question.

While contacting the agency to help investigate incorrect information is sometimes a choice you may have, it is not always the case as the burden is on you to prove that you in fact paid your account in full. Information such as your address and name can be proven with documentation you have in your possession. You may need to contact the companies the accounts are through to find out their side of why the information was reported.

On the bottom of each credit report there is a place where you can record the information you are disputing and the credit agency also explains the necessary procedures to follow when completing this process. Make sure you follow these guidelines to the exact letter, as you don’t want your claim to be thrown out or delayed. Once you have filed your dispute each creditor has up to ninety days to make the necessary changes, after the ninety days are up the credit reporting agency can make the change or at the very least take action on your behalf. This is all part of the process to clean your credit and while it does take some time to get the incorrect information corrected, the time is well worth it and could save you money and extra interest charges in the future.