Ask Stacy: Can I Repair My Own Credit?

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Maintaining a clean credit history is important. Here's a simple, step-by-step guide to make sure yours is in top shape.

This week’s question is brief, but important.

Stacy, how can I repair my own credit? — Randy

Before we get to Randy’s question, take a look at a video I did last year: I used a janitor’s cart to illustrate the process of cleaning up your credit.

Now, let’s go over the steps Randy can take to clean up his credit history, and hopefully improve his credit scores as well.

3 steps to repair your credit free

The tool you use to hammer your history into the best possible shape is the Fair Credit Reporting Act. The FCRA is a law that sets the rules for collecting, reporting and altering information in your credit history. The companies that collect and sell this information are called credit reporting agencies, or CRAs.

Before you can begin repairing your credit, you have to know what it looks like. So get a copy of your credit report from the three biggest CRAs — EquifaxExperian and TransUnion. You can get one free credit report a year from all three by going to

Step 1: Fix mistakes

Mistakes in credit reports are common. Earlier this year the FTC reported that 1 in 5 consumers had an error on at least one of their three credit reports, and 1 in 20 had errors that could result in less favorable borrowing terms. So go over your report with a fine-toothed comb to make sure it’s all true. If it isn’t, fix it. You can complain at the CRA’s website or send a letter. There’s detailed information on the dispute process at this page of the FTC website.

Step 2: Deal with the bad stuff

Eventually, negative information in your history will go away by itself, but not for a long time – seven years, unless it’s a Chapter 7 bankruptcy, in which case it’s there for 10.

But here’s the good news. You don’t have to wait years for negative stuff to die a natural death. You can get rid of negative things on your credit report anytime, at least theoretically.

There’s no law that says creditors have to report delinquencies or other negatives. In fact, they don’t have to report anything. And anything that has been reported can be removed at the whim of whoever reported it in the first place. That’s the secret to fixing your credit history.

Years ago a friend of mine had a slew of negative stuff in her credit history, all the result of a time in her life when she was less responsible. She worked patiently for a number of years, off and on, to restore her credit history to pristine condition. How? She simply wrote a letter to each creditor who had reported a negative item asking them to remove it.

This approach didn’t always work, but she was most successful in these two situations: when she was still a customer of the creditor or when she had an unpaid balance to negotiate with. Following is an example of a letter she used for credit card companies she was still dealing with:

Sept. 17, 2013

Sally Sample
123 Maple Street
Anytown, USA 12345

BankCard Services
PO Box 12345
Wilmington, DE  12345

Regarding: MasterCard account #1234-4567-8910

Dear People,

As you know, I have been a loyal customer of your company for more than seven years. Over that time period, I have received many offers from other companies for credit cards with lower interest rates or other terms that could have been more attractive, yet I’ve remained with your company.

I recently obtained a copy of my Equifax credit report and was dismayed to learn that your company has reported that I made two late payments four years ago. I’m writing today to ask you to have this negative information removed from my credit history. Having become conversant with the Fair Credit Reporting Act, I’ve learned that this is easily accomplished.

As you’re aware, my record of paying on time is unblemished with those two exceptions. Since even one negative item in my credit history is one too many, please repay my loyalty and responsibility by helping me have these items removed.

Thank you in advance for your timely response. I look forward to continuing our mutually beneficial relationship for many years to come.

Sally Sample

This simple letter, or a variation thereof, worked for her in some instances. When it didn’t, she sent it again, only this time to someone higher in the company, up to and including the CEO.

Unpaid balances can also be used for leverage. In that instance, you’d write a letter to the creditor offering to settle the debt completely by paying part or all of what’s owed, along with getting any and all negatives removed from your credit history. This is crucial: Before you pay, get a written agreement that the negatives will be removed once you do so. Some creditors will happily tell you anything to get your money, then refuse to follow through on their promises. Make notes of any phone calls, including dates, times and names. And always, always get everything in writing.

These examples rely on using leverage – being a current customer or owing money – to negotiate from a position of strength. How can you get negative items removed when you’re not a customer and don’t have an unpaid balance?

Well, you can and should still write to your creditors. Simply build a case that you shouldn’t have to suffer for years simply because you made a few mistakes, especially since you’re now a responsible citizen. If you had problems that caused the delinquencies way back when (medical bills, lost job, etc.), don’t be shy about playing a little verbal violin music.

While it’s sometimes hard to believe, the readers of these letters are actual human beings just like you, which means they’re susceptible to the powers of persuasion. And you have nothing to lose, except maybe a stamp and a few minutes.

Be aware, however, that these approaches are a long shot: no guarantees. And it may take repeated attempts. Repairing your credit isn’t like a video game. It’s more like building a ship in a bottle.

Step 3: If all else fails …

If you have negative items that simply won’t go away, you still have one option left. You can explain them.

This isn’t nearly as good as having them removed, of course, but it’s better than nothing. The FCRA allows the consumer to include a brief explanation of disputed items.

“Brief” means keeping the wording to 100 words or less. But don’t make excuses. Give explanations and resolutions. For example, let’s say you show one late payment on your credit card. You could say, “Payment late due to lost mail. Account brought current immediately upon being informed.”

Or you might say, “Defective merchandise required withholding payment. Payment made immediately upon resolution.”

What if you had three late payments in a row? You might say, “Late payments due to severe injury and loss of job. Accounts subsequently brought completely current.” That sort of thing. Of course, I’m not suggesting you lie. But if you paid a bill late, there must be some explanation that you can add to soften the impact.

That’s all there is

Fixing mistakes, asking for a break, and explaining what you can: Those are the only ways to improve your credit history. It’s not rocket science and there’s no magic fix.

That’s why you should never pay anyone to repair your credit for you. There’s nothing any company can do you can’t do yourself. So there’s no reason you should risk a rip-off or part with cash by paying for credit repair.

Got a money-related question you’d like answered?

You can ask a question simply by hitting “reply” to our email newsletter. If you’re not subscribed, fix that right now by clicking here.

Stacy Johnson

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