DIY Credit Repair

Historically a down or weakened economy opens the door to new fraud avenues.   Over the past few years we have seen not only the average credit score decrease, but credit guidelines tightened as well, making it even harder to obtain credit.  Consumers, wanting a “quick fix” to help them get financing has paved the way for the rapid growth in Credit Repair Companies.  But is all credit repair bad?  Let’s take a look at the differences.

Credit Counseling organizations provide valuable services to the public. Their main focus is on increasing financial education to consumers about better money management techniques, promoting debt reduction strategies, and helping consumers better prepared to make the most informed financial decisions.  

Credit Repair companies on the other hand, typically involve claims that the agency can restore credit in a short period of time.  These companies charge hundreds and even thousands of dollars for their services.  Money you could be using to pay off or settle some of your past due bills. 

The first thing to remember when contemplating “credit repair”, is there is nothing a credit repair company can do, that you cannot do yourself—FOR FREE. If a company claims otherwise, they are probably using illegal tactics.

By repairing your own credit, you’re also giving yourself a lesson on how credit repair works. Through your own research along the way, you’ll learn what makes a good credit score and what makes a bad credit score. You’ll develop the spending habits necessary to build and keep a great credit score. You may not necessarily get these skills if you hire a credit repair company. Without knowing exactly what you should and shouldn’t do to protect your credit score, you could mess up your credit again.

Removing the negative credit and repairing your credit report can make your financial life much easier.

Below are 6 steps for repairing your own credit.

1.    Order a report from each of the 3 main bureaus, Experian, Equifax and Trans Union.  You have the option to receive a free credit report from each one time per year, however, you may want to save time and get a tri-merged report that contains all three reports for a fee. You will want to improve your credit reports by purposefully working towards removing negative listings and improving the positive listings. If you choose to make a dispute the credit bureaus will have 45 days from receipt of the dispute to verify the veracity of their listing. The sooner you have a report and the sooner you make your disputes the sooner you will get results.

2.    Update all of your personal information with the credit bureaus.   Make sure all information is accurate and current.

3.    Read up on the laws and know your rights. There are the Federal laws: FCRA–The Fair Credit Reporting Act; FDCPA–The Fair Debt Collections Practices Act; FCBA–The Fair Credit Billing Act and others. All of the Federal laws are enforced by the FTC, the Federal Trade Commission. There are also individual state laws that govern credit reporting and debt collection. Find information about your individual state as well.

4.    Compare your reports and determine the order or urgency. There are some debts that may have passed the Statue of Limitations for your State.  If they have passed the statute of limitations you need to dispute them and have them removed. The statute of limitations timeline is always from the date of the first delinquency. You may also have debts showing on your credit report that are completely inaccurate. There may be debts that do not belong to you or have different terms than the ones you originally agreed to. These listings can also be disputed. For items that are accurate and still in the statute of limitations that rightfully belong to you, you will need to contact the creditors directly and make arrangements.

5.    Be specific and detailed in your Dispute Letters.  It is not recommended that you list all of your disputes in one letter as it can get too confusing and some problems may get lost in the shuffle. Dispute each item separately or at the very minimum just combine a few at a time. You will also need to be patient and give the credit bureaus time to verify your disputes. They are required to do it within a certain period of time (45 days and 5 days to respond back to you) or remove it from your credit report. Do not submit more disputes while they are verifying the information on your past disputes, you do not want to confuse the issue any more than you have to.  For sample dispute letters go to

6.    If your reports come back verified, you may have to send out a debt verification letter to the original creditor to verify that the loan if still valid and belongs to you or a debt validation to a collection agency, which validates their right to collect the debt. If you have just a few late payments on an otherwise upstanding account, you may need to send out a “goodwill” letter that explains your temporary lapse of how you made the mistake of being late but that you are now back on your feet and will never allow it to happen again. Many times these explanations can be added to your report and they can be helpful with creditors.

An often neglected but very crucial aspect of repairing your credit involves creating more good credit and improving the positive listings. An excellent way to achieve this is by asking for a higher credit limit with the lenders that you are in good standing with. Get a higher limit but do not use it! You can also apply for new credit, such as a credit card.  Keep your balance below 30% of the amount you are approved for in order to improve your credit scores.

Building a long-term reliable history with creditors who will report your good credit to the credit bureaus will go a long way to helping you to establish long-term good credit. Make sure that the credit agreements that you now have remain current and try to quit using additional credit. Ironically the people who have the highest credit scores are the people who have a solid access to credit but don’t use it too much.

If you have bad credit, do yourself a favor by repairing your own credit. Not just because of the money savings, but also because of the credit education you get from doing your own credit repair.  By gaining greater credit understanding, you are less likely to fall into a bad credit situation again.


About jenniferhamby

Jennifer Hamby, Executive Vice President of My Credit My Future, has worked in the financial sector since 1996. She is dedicated to educating consumers on financial education and responsibility. Having worked in Data Facts’ Nashville office since 2007 as an account executive, Hamby realized the need for financial education that was informative, yet easy to understand and attainable. Partnering with both Junior Achievement, and Tennessee Jump$tart, in providing financial education, opened her eyes to the tremendous benefits in providing financial literacy and resources for consumers to aid in making better financial decisions.
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