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8 Steps to Repair Your Credit on Your Own

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If you’re struggling with personal debt and credit issues, you may think you need to spend even more money to have a credit repair company help you. The good news is you can repair your credit and rebuild your credit score on your own for free.

Good credit repair can be a positive do-it-yourself experience. You can save hundreds of dollars by not hiring a credit repair service to help you. Plus, the education you’ll gain in creating the building blocks for better credit will stay with you for life. That can help you stay on top of your credit score so you don’t have to rebuild it again in the future.

How can you get that job done? Read on — and take the following action steps to repair your own credit score.

1. Review your credit reports

The first step is to review all of your credit reports. Each of the three major credit bureaus — Equifax, Experian and TransUnion — has a credit report for you. Reviewing these reports lets you know where you stand, which unpaid accounts need addressing and whether there are any errors on your reports that need to be corrected.

You can launch this process at This website, authorized by the U.S. federal government, offers a free credit report once a year from each of the three main credit reporting agencies.

Review each of the credit reports thoroughly and look for errors, such as the wrong account balance or wrong address. Negative items can stay on your credit report for up to seven years, so if you think something is wrong, it’s important to clear it up.

2. Dispute credit report errors

You’ll need to report any mistakes directly to the credit bureau where the incorrect information appeared. You can launch your dispute online by clicking the following links:

Equifax disputes

Experian disputes

TransUnion disputes

However, some experts recommend putting your dispute in a letter sent via certified mail to make sure it’s received. This sample credit dispute letter from the Federal Trade Commission is a good guide.

  • Include key information such as your full name, address and Social Security number. Include the date as well.
  • Note right away that you are contacting the agency to dispute and correct a specific credit reporting item. Ask specifically to have the error corrected or removed outright.
  • Include any account information, like your account number, that will make it easier for the credit reporting agency to address and resolve the dispute.
  • Specify the error. What is inaccurate or erroneous about the item and why?
  • Make your case and include as many specifics and supporting data as you can.
  • Make a copy for yourself and send the letter via certified mail to the intended credit reporting agency. Ask for a return request letter to be sent to you, to prove the agency received your letter.
  • Anticipate a return response on your dispute letter within 30 days. If the dispute isn’t resolved to your satisfaction, send a follow-up letter to the credit reporting agency reminding them of their legal obligation to either remove the error or respond to your letter within 30 days. Keep a copy of this letter in your files, as well.
  • If that fails to resolve the issue, you can file a complaint with the Consumer Financial Protection Bureau. They may be able to resolve the issue for you.

3. Clear up overdue accounts

The biggest reason for a poor credit score is usually missed or late payments. Payment history is the single largest factor in your credit score calculation. It makes up 35% of your FICO score. If you’ve missed paying your credit card, auto loan or mortgage, your credit score has likely suffered.
To repair it, you’ll need to pay off delinquent debts. You may want to work with a credit counselor, who can help you consolidate your debts and come up with a debt management program to pay off what you owe.

You can find a credit counseling agency near you through the National Foundation for Credit Counseling or the Financial Counseling Association of America. Their members are nonprofit agencies who can help you with free advice or low-cost counseling.

4. Pay your bills on time going forward

You can begin rebuilding your credit score by making steady, on-time payments on all of your bills. One way to make that easier is to set up auto-pay for each bill so it’s paid automatically ahead of the due date.

You can even set up alerts so you’ll get a notification on your smartphone or via email before the bill is going to be paid. That way, you can be sure to have money in your bank account to cover the bill. Set it and forget it. You’ll never worry about missing a payment again.

5. Build good credit with a secured credit card

To have a good credit score, you need to be using some kind of credit. That’s because you can’t have a payment history if you aren’t using credit. It may seem counterintuitive, but the main way creditors judge whether or not you’ll be reliable about handling new credit is by looking at how you’ve paid your credit accounts in the past.

If you don’t have any open credit cards and your credit score is low enough that you can’t qualify for a traditional credit card, consider getting a secured credit card. Secured cards are typically easier to obtain than unsecured cards, but they require that you make an initial deposit equal to your credit limit.

Go ahead and use the secured card for small purchases that you pay off on time every month. That way, you’re building a good track record of on-time payments. Once you’ve made on-time payments for about six months, you should see improvement on your credit score.

6. Use credit, but keep your balances small

After payment history, the most important factor in your score is amounts owed. This factor makes up 30% of your FICO score.

This is where your credit utilization ratio comes in. Your credit utilization ratio is the amount of money you owe divided by how much credit you have available. For example, if you have a $10,000 credit card limit and you owe $3,000 on it, you have a credit utilization ratio of 30%.

The lower your credit utilization ratio, the healthier your credit score. You want it to be as low as possible, but no more than 30%.

7. Pay more than the minimum amount owed on credit card bills

The minimum amount due, listed on your credit card bill, is a very low percentage of your balance. If you only pay that, it will take you forever to pay off your debt. Credit card bills are now required to detail just how long it will take you to clear your balance if you only pay the minimum.

Aim to pay off your balance in full every month. That will not only save you money in interest, it will lower your credit utilization ratio and boost your credit score in the process. If you have to carry a balance, try to pay it off within a couple of months.

8. Know that you have the law on your side

Review this summary of the Fair Credit Reporting Act to familiarize yourself with the rights and obligations you have regarding your credit. According to the Consumer Financial Protection Bureau, the FCRA “promotes the accuracy, fairness and privacy of information in the files of consumer reporting agencies.”

Under FCRA mandates, you have the following rights:

  • To be told if any information in your file has been used against you;
  • To request a credit score;
  • To dispute incomplete or inaccurate information;
  • To have consumer reporting agencies fix or delete inaccurate, incomplete or unverifiable information. Such information must be fixed or removed, typically within 30 days;
  • To not have consumer reporting agencies report outdated negative information;
  • To limit access to your file;
  • To grant consent for reports to be provided to employers;
  • To limit “prescreened” offers for credit and insurance you receive based on information in your credit report. Such unsolicited offers must include a toll-free phone number so you can remove your name and address from the lists they are based on, if you choose; and
  • To place a “security freeze” on your credit report, which will stop a consumer reporting agency from releasing information in your credit report without your consent.

The takeaway

There are myriad reasons why repairing your own credit is a good idea. At the top of the list: you’ll learn life-changing financial habits that can translate into lower debt, more savings and easier access to credit. You’ll also save money and time by not having to use a professional credit repair firm.

Best of all? If you apply all of the tips above, you’ll likely wind up with a higher credit score. You could be on your way to earning all the perks that go with someone who has a FICO score of 700 or higher.

There’s no time like the present, so get going on your personal credit repair program. The sooner you do, the sooner you’ll start reaping the benefits.


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