Should You Repair Your Own Credit?

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You’ve managed to get back on your feet after a financial disaster, and you’ve finally reached the last hurdle: the credit repair process.

It’s no secret that your credit needs to be rebuilt, but the thought of undertaking what seems to be such a complicated task frightens you. Should you go it alone to save money, or place the task in the hands of a professional who’s far more experienced than you are?

In the video below, Money Talks News founder Stacy Johnson explains how people can repair their own credit without paying someone for help. Take a look, then keep reading for additional information, including what to look for if you decide to go the professional route after all.

Here are the steps you can take yourself, for free, to repair your bad credit:

Step 1: Access free copies of your credit reports

Visit to retrieve a free copy of your credit report from each of the three credit reporting agencies. Once they’re in hand, thoroughly analyze the information in them for errors, omissions and fraudulent accounts.

Also, be on the lookout for negative marks that should have dropped off your report because they’re more than 7 to 10 years old. Most bad items drop off in seven years.

Did you receive your three free credit reports through earlier this year and don’t want to pay for new reports from the credit bureaus? According to the Federal Trade Commission, you’re also entitled to a free copy of a credit report if:

  • You are denied credit, insurance or employment, or offered unfavorable rates because of the content of your credit profile. You have to ask for the free report within 60 days.
  • You are not working, and you plan to begin a job search within 60 days.
  • You receive welfare benefits.
  • Inaccuracies exist on your report because of fraud, including identity theft.

Step 2: Fix errors

To file a formal dispute of an error in a credit report, notify the credit bureau online or via a letter. Once you have done so, it will contact the other credit bureaus. If you decide to use a letter, it should include:

  • Your name and address.
  • The items in dispute.
  • Your argument and any supporting facts to support your claim.
  • A formal request for the resolution of the issue.

The FTC provides a sample letter here.

Among the information you send to the credit bureau should be a copy of your credit report that clearly identifies the item in question and also copies of your documentation that supports your claim that the information is false. Don’t send the originals. Send the package via certified mail with a return receipt requested to ensure it arrives at its intended destination.

Upon receipt, the credit bureau must investigate and communicate its decision within 30 days. Should it reject your request, you can ask that a note detailing your argument be added to your credit file.

Step 3: Goodwill adjustments

At this point, you may have pulled your credit reports and concluded that the contents are accurate. Even if they’re riddled with negative information, all hope is not lost.

Time makes negative but accurate information fade way. However, you can try writing your creditors and requesting that they remove the negatives from your report right away. If they comply, this is called a “goodwill adjustment” in the credit world.

Remember to be as pleasant as possible during the process; creditors aren’t required to remove negative information.

Stacy Johnson says you’re most likely to find success with this approach if you still have a business relationship with the creditor or if you have an outstanding balance that you can negotiate about.

“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,” he wrote. Make sure you get that agreement in writing from the creditor.

Hiring a professional

Still not convinced that you can do this yourself? If you decide to engage a credit repair company, be very careful. There are lots of bad actors in this business.

Some so-called credit repair companies make inflated promises to consumers desperately seeking relief from their credit blunders. Some promise to give you a fresh start, while others claim they can erase any negative marks that exist and raise your score in a flash.

Both are false promises. The FTC says it’s against the law for credit repair companies “to lie about what they can do for you, and to charge you before they’ve performed their services.” (To further protect yourself, become familiar with the Credit Repair Organizations Act.)

The FTC adds:

No one can legally remove accurate and timely negative information from a credit report. You can ask for an investigation — at no charge to you — of information in your file that you dispute as inaccurate or incomplete. Some people hire a company to investigate for them, but anything a credit repair company can do legally, you can do for yourself at little or no cost.

Gerri Detweiler, director of consumer education for, wrote:

If you are contemplating credit repair, ask them, “Exactly what do you do for me?” If they tell you that they will dispute information, then ask them how they will do that. Drill down deep enough and you’ll probably find that they will send letters to the agencies requesting that negative information be verified. You may wind up paying someone hundreds, or thousands, of dollars just to send form letters for you.

Another practice some credit repair companies engage in is called “jamming.” explains:

In “jamming,” a repair clinic will challenge everything, including records of debts that the consumer failed to pay. If the review isn’t complete because, as commonly happens, a data furnisher doesn’t get back to the credit bureau in time, the agency is obligated to remove the disputed record. On Day 31, the credit report is cleansed of disputed but unverified items, and the bad debt vanishes from the consumer’s report.

The removal of valid items won’t be permanent, though. Generally, lenders report monthly to credit bureaus. So in a few days or weeks, when the lender reports back, the disputed, but now verified item comes right back. The record of the bad debt gets reinserted onto the credit report. In addition to reinserting verified negative marks, credit bureaus may refuse to investigate disputes if they figure out they are frivolous.

Here’s an alternative plan

The FTC suggests that if you lack the discipline to budget and pay your bills on time, you consider seeking credit counseling. But again, make sure you find a reputable organization. The FTC warns, “In fact, some credit counseling organizations — even some that claim nonprofit status — may charge high fees or hide their fees by pressuring people to make ‘voluntary’ contributions that only cause more debt.”

Who is reputable in this field? A leading source of accreditation in the industry is the Council on Accreditation. The National Foundation for Credit Counseling requires that all of its members have COA accreditation. The Association of Independent Consumer Credit Counseling Agencies also requires its members to be accredited by COA or one of two other organizations.

If you’re still seeking help with credit restoration, you can visit our Solutions Center or click on the “Credit Restoration” button to the left of this article.

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Comments & discussion

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  • senior3citizen

    I am hoping with FICO re-doing their scoring method sometime this fall, according to Fortune website, this will save some people some bad scoring. I still think having one credit card and paying most or all of it off monthly is better than 3-4 cards and paying some on each. Thinking logically, I thought this method would have bettered my score. But, FICO disagrees. You ultimately get a better score having more credit cards than having just one! If I had known closing credit card accounts and having one would have cost me a decline of 84 credit points I would not have done it!! I have written all three agencies about this and can’t wait to see what answers I get back. I also think FICO scoring should not be the ultimate decision maker used in getting credit. What happened to individual circumstances, etc being considered in the decision making process?

    • speaksthetruth

      I have a ton of cards. Over 10. No I’m not in debt. I don’t owe anyone a cent. Why do I have so many cards? Well, I don’t enjoy paying interest. The second one card now carries interest I apply for another with 0% APR for 12-18months. I’ve been doing that for over 10 years and I literally haven’t paid a cent in interest for those years.

  • sbrs

    I’m 2 years out of a divorce where my ex ran up tens of thousands of dollars in joint debts, got behind on paying it all and subsequently trashed our credit. I cancelled all our joint cards. As soon as the divorce was final I aggregated all the debts I could into a credit counseling plan, and have been paying timely payments ever since. In two months it will be paid off! I also settled two accounts for less than the balance and will be paying the balance only on two more credit cards for another year. I’ve pulled my credit reports and everything is accurate. The one thing I cannot get my name off of is my ex’s car loan, as we took it out jointly. (Any ideas?) He is perpetually months behind on this and he won’t refinance. Question: I still cannot get ANY credit cards – not department store cards, not a card through my bank – nothing. The only card I have is a secured card from my credit union, which I am very responsible with. I would think that 2 years of good payment history would work in my favor, but it has not seemed to raise my credit score enough to qualify for any credit. I have no other debts, my car is paid off and I rent an apartment. I’ve been employed in the same place for 10 years. Did I do the right thing by paying thousands of dollars of our joint debt to clear my name? How long should I wait before applying for a credit card? Any advice on getting off his car loan or rebuilding credit from here? Why am I still being denied credit?

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