The fact that you have a bad credit rating on your credit report could have been due to things that happened in your life and were beyond your control. Some of these could have been illness, job loss, divorce, or even a personal tragedy. Before lenders will turn you down for a loan, they will usually give you a chance to explain any unfavourable items showing up on your credit report. If you have a satisfactory explanation, you will probably receive approval. If however, your reason is simply that you forgot to make the payments they will not see this as satisfactory.

Most people tend to overspend and then get themselves into financial trouble. There are steps you can take to repair your bad credit report and if you have been diligent in making your payments in the twelve months prior to applying for a loan, lenders will look favourably on your application.

	The first thing you should do is to stop using your credit cards. You should probably keep one card to use in case of emergencies, but cut the rest of them up. Pay off the accounts with the lowest balance first and then pay the extra cash on the others until you don’t owe any money on your credit cards. This will show up on your credit report and will work to your advantage. However, you should not close out all of your credit card accounts. Keep at least one, so that you will have a record of credit at the time to apply for a loan.
	Make a budget for yourself. Itemize all the monthly payments you have to make. Include the payments you have for utility and telephone as well as money needed for groceries, clothing and entertainment. By subtracting the expenses from the income, you will be able to tell whether or not you need financial help. You will also be able to see where if you have any extra cash that could possibly help to pay down some of your debt each month.
	Get a copy of your credit report to ensure that everything is as it should be. If there are any mistakes or omissions you can contact the agency to begin the correction process.
	Have a plan to pay off your debts so that you will eventually become debt-free. This may require a little ingenuity on your part, such as getting a second job or getting counselling for the credit problems.
	Talk to your creditors to see if other arrangements can be made for lower payments or see if you can have a lower interest rate. When creditors see that you are making an effort to repay the money, they are usually more than willing to help you.