Fixing Your Credit? Do These 5 Things, Avoid These 3

If your credit is in bad shape, repairing it can be one of the smartest things you do in 2017.

Removing negative items from your credit report can help improve your FICO score, making it easier to:

  • Buy or rent a home
  • Get insurance
  • Buy a car
  • Get a job

A higher credit score can especially pay off in lower interest rates when you go to acquire a mortgage or car loan.

That’s why so many people try to repair their credit. Many of these consumers turn to professionals for help, but experts warn you to be careful, as scammers are everywhere.

In truth, there is nothing a credit repair company can do for you that you can’t do for yourself. Still, some consumers are more comfortable seeking the help of a professional.

In case you are among them, we’ve partnered with Debt.com, accessible through our Solutions Center, to match you with reputable, trustworthy experts. They can guide you through the process of repairing your credit.

Whether you go the DIY route or seek out professional help, there are some things you should do, and things you should avoid. Let’s start with the things you should do:

Get free copies of your credit reports

Visit AnnualCreditReport.com to get a free copy of your credit report from each of the three credit reporting agencies. Then, thoroughly scrutinize the information in the reports for errors, omissions and fraudulent accounts.

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

Fix errors

Notify the credit reporting agency online or by letter — see a sample of a letter at the Federal Trade Commission website. When you notify one agency, it will contact the other credit reporting agencies. The letter should include:

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

Send copies (not originals) of documentation that supports your claim that the information is wrong. The credit reporting agency will have 30 days to investigate and communicate its decision.

Request a goodwill adjustment

If your credit reports contain contents that are accurate but negative, write to your creditors and ask them to remove the bad information right away. Be polite, as they aren’t required to comply with your request. However, as Money Talks News founder Stacy Johnson notes, they might be more willing to grant your request if you still have a business relationship with them.

Know your rights

The Credit Repair Organizations Act (CROA) makes it illegal for credit repair companies to lie about what they can do for you, or to charge you before they’ve performed their services. This law, enforced by the FTC, requires credit repair companies to explain:

  • Your legal rights in a written contract that also details the services they’ll perform
  • Your three-day right to cancel without any charge
  • How long it will take to get results
  • The total cost you will pay
  • Any guarantees

If a credit repair company you hired doesn’t live up to its promises, the FTC says you have these options:

  • Sue them in federal court for your actual losses or for what you paid them, whichever is more.
  • Seek punitive damages — money to punish the company for violating the law.
  • Join other people in a class action lawsuit against the company, and if you win, the company has to pay your attorney’s fees.

Avoid these 3 ‘tricks’

When you repair your credit, there are also some things you should avoid — specifically, the following four “tricks.” Experts say these gimmicks indicate you might be dealing with a scammer:

The new number trick. Some credit repair agencies advise you to start a new credit file by getting a new tax ID number — either a credit profile number (CPN) or an IRS-issued Employer Identification Number (EIN) — to use in lieu of your Social Security number. The new number might resemble a Social Security number. This trick is illegal. The FTC warns that scammers may be selling stolen Social Security numbers, often taken from children. By using a stolen number as your own, the con artists involve you in identity theft.

The lying trick. Scammers might tell you to give false information on your applications. The FTC reminds consumers it’s a federal crime to lie on a credit or loan application, misrepresent your Social Security number, or obtain an EIN from the IRS under false pretenses. You could go to prison.

The upfront charges trick. The law requires credit repair companies not to collect a dime from you before they perform any services.

For more on the do-it-yourself route, check out “3 Steps to Repairing Your Own Credit.”

Have you tried to repair your own credit or used a professional? How did it go? Share with us in comments below or on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
8 Things You Can Buy for $1 or Less on Amazon
8 Things You Can Buy for $1 or Less on Amazon

They say you get what you pay for — but not always. Sometimes, you can uncover a good deal at a great price.

If My Spouse Dies, Can I Get Her Social Security?
If My Spouse Dies, Can I Get Her Social Security?

If a spouse dies, will the survivor collect the other’s share in addition to his or her own?

Big-Ticket Things You Should Never Buy
Big-Ticket Things You Should Never Buy

In this week’s podcast: Are you wasting big money on these common purchases?

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

7 Secret Perks of Individual Retirement Accounts
7 Secret Perks of Individual Retirement Accounts

IRAs come with bells and whistles that many other accounts lack — including some perks you may not know exist.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
7 Kirkland Signature Items to Avoid at Costco
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

Am I Eligible for My Mother’s Social Security Benefit?
Am I Eligible for My Mother’s Social Security Benefit?

Can an adult daughter tap into her late mother’s benefit?

9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

This Surprise Factor Can Raise Your Risk of Dementia
This Surprise Factor Can Raise Your Risk of Dementia

Nearly half of U.S. residents may face this threat.

Organize Your Home With These 10 Thrift Store Finds
Organize Your Home With These 10 Thrift Store Finds

Resolve to be clutter-free in 2021 with these secondhand purchases.

11 Laws You Could Be Breaking Without Knowing It
11 Laws You Could Be Breaking Without Knowing It

Seriously? Fibbing about the weather is a crime? This and other little-known legal traps await the unwary.

Is This Treatable Condition Causing Your High Blood Pressure?
Is This Treatable Condition Causing Your High Blood Pressure?

Researchers say too many doctors are overlooking this potential source of hypertension.

13 Things Seniors Can Get for Free — or Almost Free
13 Things Seniors Can Get for Free — or Almost Free

There are many ways to get cheap or free services and goods after reaching a certain age.

These Are the 3 Best Used Cars You Can Buy
These Are the 3 Best Used Cars You Can Buy

These vehicles boast reliability, safety and long-lasting value.

21 Items to Cut From Your Budget That You Won’t Even Miss
21 Items to Cut From Your Budget That You Won’t Even Miss

Start off the new year by implementing these small-but-smart savings strategies. They’ll soon add up.

Internet Providers Can’t Charge You for This Anymore
Internet Providers Can’t Charge You for This Anymore

Starting this month, your ISP no longer can bill you for this fee.

Taking a Multivitamin? Here’s Why You Should Reconsider
Taking a Multivitamin? Here’s Why You Should Reconsider

A new study has bad news for the millions of Americans who spend money on multivitamins.

15 Painless Ways You Can Cut Costs in 2021
15 Painless Ways You Can Cut Costs in 2021

Follow these tips to save, so you’ll have money for things that really matter.

9 Small Expenses That Are Bleeding Your Budget Dry
9 Small Expenses That Are Bleeding Your Budget Dry

Keep more of future paychecks by eliminating these budget-busting unnecessary expenses.

11 Huge Retirement Costs That Are Often Overlooked
11 Huge Retirement Costs That Are Often Overlooked

Does your retirement budget account for all of these costs?

7 Tricks to Cleaning Your Bathroom Faster
7 Tricks to Cleaning Your Bathroom Faster

These tips can get your bathroom sparkling with little time and no elbow grease.

20 Amazon Purchases We Loved in 2020
20 Amazon Purchases We Loved in 2020

These practical products made everyday life a little easier last year — and will do so in the new year, too.

10 Times You’re Right to Be a Cheapskate
10 Times You’re Right to Be a Cheapskate

Clever shoppers can save money without sacrificing quality. Here is how to do it.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.