Can You Really Repair Your Own Credit for Free?

You have probably heard the advice not to waste money on credit repair. You’ve been told there is nothing they can do that you can’t do on your own. But there you are staring at your credit report or your credit score and you have no clue what to do next. That’s when the idea of hiring someone to just take care of it starts sounding very attractive.

But before you shell out big bucks, you want to understand exactly what you are paying for. And you’ll want to weigh that against an investment of your time to work on your credit.

First, I’ll preface this by saying that I don’t object in theory to the idea of credit repair companies. I pay someone to do my taxes and I can see why someone who is overwhelmed (say after a divorce, or while running a small business) would want to get expert help with their credit.

But what I do object to is paying someone a lot of money for something that is basically a gamble — and a good amount of credit repair is just that, as I will describe in a moment.

How Credit Repair Works

There is one primary objective with credit repair: to raise your credit scores. For most people, accomplishing that means they need to get rid of negative information that is hurting their scores.

Credit repair companies largely try to accomplish this by challenging everything in the credit report that may be bringing down scores, whether it is accurate or not.

They do this by mailing letters to the credit reporting agencies, asking them to investigate the items they would like removed. By law if you ask the credit reporting agency to investigate an item, in most cases they must do so within 30 days. If the information is not confirmed by the source it must be removed.

That’s where the gamble comes in. The creditor or company furnishing the information may or may not respond to the dispute. If they don’t, it will no longer be reported — unless the creditor furnishes it again, and there are some rules they are supposed to follow before re-reporting this data.

There’s no magic trick to this process. It’s a matter of being organized and persistent. You don’t have to use any specific language in your credit report dispute letter. Referencing sections of the Fair Credit Reporting Act is not going to make the credit reporting agencies quake in their boots. They know what they are required to do.

You do have to make sure your letter is clear and that the person processing your request can understand what exactly you are asking them to look into and why.

Credit reporting agencies get thousands of these letters every single week. If you have a picture in your mind of someone reading your letter and picking up the phone or logging into a computer to check with the source to find out if the information is accurate, you’re mistaken. They do log your complaint into a computer, but from there it goes directly to the creditor, which then must process the dispute on their end. How effectively they do this has been a matter of debate (and some lawsuits), but it’s fair to say there is a great deal of automation in the process, which can work for or against you, depending on your situation.

The letters these firms send on your behalf are typically variations of form letters. The return address, the font, the layout and everything else about them are often the same and the agencies receive stacks and stacks of them every day to process.

I want to make sure you understand this point if you are thinking about hiring a credit repair company. 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 keep 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.

If you want to pay for that, it’s your choice. But understand that you can just as easily write a letter yourself and send it (with proof of delivery of course) for just a few bucks.

Building Credit

Any credit repair firm worth its salt will also make sure you are building positive credit references. After all, getting the negative information off your reports is only half the battle. You can get a bankruptcy or tax lien removed, for example, and your score can actually drop. (That’s due to the complicated, behind-the-scenes way scoring models group consumers together and compare them to other consumers in their group, rather than with the entire universe of people with credit reports.)

To build strong credit, you need a positive payment history going forward. Any credit accounts you still have must be paid on time 100% of the time from here on out, and you may need to consider getting a secured credit card to help you rebuild credit.

One more task: If you have debt, part of your repairing your credit is paying down credit cards where your reported balances are greater than 20 – 25% of your credit limits. Paying down these debts can quickly have a positive impact on your scores.

That’s the basic jist of what credit repair involves. Of course every person’s individual situation can vary somewhat. You may need to figure out what to do about unpaid collection accounts, for example: pay them, settle them or let them sit until they are too old to be reported. Or you may have tax liens on your reports, which you may be able to get removed from your reports by requesting a withdrawal through the IRS Fresh Start Program. (Again, that’s something you can do for free yourself if you chose.)

However you decide to approach this, if you expect miracles, you may well be disappointed. If your credit has been wrecked after a divorce or bankruptcy, it’s not likely you are going to have a high credit score in a few months just because you are willing to pay big bucks for someone to fix it.

At the same time, if you are going to try to repair your credit yourself, you don’t have to reinvent the wheel. There are plenty of good resources that will help you develop and implement a strategy for building better credit.

Free DIY Credit Repair

Start by ordering your free annual credit reports from all three major credit reporting agencies. The data in your reports is used to calculate your credit scores, and you need to see what’s being reported so you can identify mistakes or things you need to work on.

Get a credit score. It will be helpful for understanding where you fit in. But a number alone isn’t that useful. (That’s why a credit score from say, your credit card company, may not be particularly helpful here unless if goes into detail about what is affecting your score.)

You can get a free credit score along with a breakdown of the factors affecting your score for free at You will also get a personalized action plan that will help you understand what steps you can take to build stronger credit and you will be able to track your progress over time.

You’ll also find a wealth of DIY credit repair tips that will explain various aspects of your credit reports and what you can do about them, including inquiries, judgments, medical bills, collection accounts, debt and more. You can ask specific questions about those topics in the article comments.

Several books can help you understand how credit reports and scores work, including The 90-Day Credit Challenge by Jeanne Kelly (a contributor to, Your Credit Score: How to Improve the 3-Digit Number That Shapes Your Financial Future by Liz Weston, Credit Scores & Credit Reports by Evan Hendricks, You’re Nothing But a Number by John Ulzheimer and The ABCs of Getting Out of Debt: Turn Bad Debt into Good Debt and Bad Credit into Good Credit by Garrett Sutton. These books may also be available at your local library.

If you still aren’t sure what to do, Experian offers a one-on-one review of your credit reports. The Experian Credit Educator consultation costs $39.95. They aren’t going to recommend you dispute accurate but negative information, of course, but they will review your Experian credit report with you, answer your questions and offer specific steps for improving your credit.

Finally, if you decide to hire someone to fix your credit, make sure you understand what they offer, how much it will cost, and what kinds of guarantees they offer. By law, credit repair companies must give you this information in writing, along with a three-day right to cancel.

More on Credit Reports and Credit Scores:

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