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Have you been considering hiring an agency to help you repair your credit? Such companies do exist — and some are legitimate. But everything an agency can do (legally) to help you repair your credit, you can do yourself — for free.
Any company that promises to fix your credit “overnight” is a scam. Credit repair takes time, patience and the right information. You need to know exactly who to contact and the steps to take to fix mistakes or make arrangements to pay off debts (or have them forgiven).
Why Do You Want to Fix Your Credit?
A low credit score can cost you hundreds — or thousands — of dollars a year. When you repair your credit, you’ll enjoy:
- Lower interest rates on loans (personal or car)
- Lower mortgage rates
- Lower credit card interest rates
Since landlords and employers may also check your credit, a good credit score may make it easier to find a job or a nice place to live.
Fixing your credit takes time, but we’ll show you how to do it in four easy steps.
1. You Can’t Fix What You Don’t Know is Broken: Check Your Credit Report
The first step to repairing your credit is getting copies of your credit reports so you know what you need to fix. You’ll need an updated copy (less than 90 days old) of your credit report to dispute information.
You don’t have to pay for your credit reports. You are entitled to one free credit report from each of the three major reporting agencies (Experian, TransUnion and Equifax) every 12 months through the website www.annualcreditreport.com.
Already got your free credit reports for the year but need updated copies? Find out how in this article, “How to Get a Credit Report with No Hidden Fees.”
You can also get free copies through many of the credit monitoring services, including FreeCreditReport.com. Just be sure to cancel during the trial period or you’ll be billed.
2. Study Your Credit Report for Errors
Errors are very common on credit reports — so common that most people have at least one error on one of their credit reports. The credit bureaus don’t verify the information provided.
Make a list of every mistake, including:
- Incorrect information (such as addresses and places of employment)
- Payments reported as late which were not
- Accounts reported in default which are not
- Other inaccurate account information
- Outdated information
Also make a list of things that need improvement but are, unfortunately, correct. This includes:
- Unpaid debts
You can learn more about reading and understanding your credit report in this article.
3. Begin Disputing Inaccurate Information
Begin disputing inaccuracies. You can do this in one of three ways with all three bureaus:
- By phone
- By mail
Provide as much documentation as possible, and maintain copies of everything you submit for your own records. Expect the process to take time. TransUnion says the process can take up to 45 days.
If you file your disputes online with any of the three agencies, you can also check the status online.
Here are the websites to file credit report disputes online:
- TransUnion: http://www.transunion.com/corporate/personal/creditDisputes/submitDispute.page
- Equifax: https://www.ai.equifax.com/CreditInvestigation/loginDisputePage.action
- Experian: http://www.experian.com/disputes/
Don’t forget to follow up if you haven’t received a response within 45 days, and also follow up at the end of the process to make sure the inaccuracies have been corrected.
4. Fix Your Credit
After you’ve submitted the information to dispute inaccuracies, it’s time to look at old debts you haven’t repaid. Call your debtors directly and negotiate a settlement or payment plan. An unpaid debt is worse on your credit report than one that is slowly being paid off. Set a budget and work at paying off your debt — and watch your credit score rise.