For whatever reason, whether it is bankruptcy, mounting debts getting out of control, or there are erroneous reports on your credit report, your credit rating is too low to get a loan of any kind. Though a bankruptcy can remain on your credit report for up to ten years, mounting debt seems impossible to bring down and erroneous reports seem to be cemented to your credit report, there is a way to repair your credit legally.

Actually, rebuild would be a better term but there is some repair to it, especially in the case of erroneously reported items on your report. The best thing to do would be to hire an attorney who is familiar with the credit laws but not everyone can afford the legal fees involved. Though it will take a lot of effort, you can repair your credit yourself. Below are some tips on how to repair your own credit.

1. Don't buy into the 'create a new credit file' scam. This is illegal and will land you in more trouble than you want. Creating a new credit file is credit fraud. Some people will try to sell this idea as a way to get money from desperate people looking for a way out.

2. Become familiar with the Fair Credit Reporting Act. This will help you determine if there could be errors on your credit report and tell you what the credit card companies and loan companies can and cannot do with regard to your debts. It can also help you avoid future problems.

3. Get copies of your credit report from each of the three major credit reporting bureaus. Go over them carefully to make sure everything is correct. If anything seems to be incorrect, get a statement regarding anything you think is reported in error. Gather any proof you can as to why it is an error.

4. Dispute any bad reports you disagree with in writing to the credit bureau on plain paper and include any notarized and/or official documents of proof that the item reported is in error. For multiple items, send separate letters of dispute as only the first one will really be looked at if they are all sent together. It is also a good idea to not send in your dispute letters during a high volume time of year, such as November through January, if it can be avoided. Processing your dispute will take considerably longer during that time.

5. Make sure you pay all your regular monthly bills on time or early every month. This will help raise your credit rating enough to begin taking out small loans that you can afford to repay quickly.

6. Be consistent in repaying any money borrowed from any institution that reports to the credit bureaus. The better you are about paying off these debts quickly, the quicker your credit rating will go up.

Eventually, you will be able to get a low limit credit card or even a car loan. If you are making regular payments on these, you will soon be able to get a larger loan, such as a home loan, at a better interest rate than would be possible if you just waited out the statute of limitations on your bad credit. So, if your are willing to work hard at it, you can repair your credit yourself rather than let the credit reports determine whether you can buy a house or car in two or three years instead of ten.