Do-it-yourself projects are so popular, the market for them could be worth close to $14 billion by 2021. From home renovations to credit repair, consumers are taking control back into their own hands.
That’s right: Anybody, including you, can make DIY credit repair their next personal project. If you’re suffering from bad credit and want to get your personal finances in order, credit repair is a process that can help ensure your credit report is totally fair and accurate—and that your score is fair and accurate as well.
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Did you know the Federal Trade Commission found 1 in 5 Americans had an error on their credit report? Those errors could make you pay more for auto loans, home insurance and more. Hidden credit report mistakes can be as harmful as hidden leaks around the home.
Want to roll up your sleeves and fix the situation yourself? We’ve got you covered. Here’s our step-by-step guide for how to repair your credit on your own.
What is DIY credit repair?
First off, let’s clear up what credit repair is and isn’t.
Mistakes on a credit report can happen. That’s reality. Credit reporting agencies employ real people, and so do lenders and creditors. Human error can lead to inaccurate data reporting that negatively impacts your credit history and credit score, like an on-time payment being marked as late.
The credit repair process involves three basic steps:
- Identifying credit report mistakes.
- Disputing incorrect information with the credit bureaus.
- Getting errors removed or corrected.
The upside is that you can undertake all the necessary action on your own. Just be aware that DIY credit repair will require its fair share of elbow grease and effort. If that’s not your style, a credit repair company can help.
However, credit repair only works for negative information that is inaccurate, unfair or unsubstantiated. If the information is accurate and timely, credit repair is probably not an option. That said, there’s no telling what credit report mistakes could be hurting you until you take a look! Your credit score affects a lot, including your eligibility for loans and the rates you are offered. Without a fair credit score, you might not get a fair quote or interest rate, which is why ensuring your score is accurate has long-reaching implications.
Step 1: Request your free credit report(s)
Credit repair all starts with your credit report. Your FICO score alone can’t tell you much about the specific negative information affecting it. You need your entire credit report to give you the full story.
Under the Fair Credit Reporting Act (FCRA), you are entitled to a free credit report from each of the three major credit bureaus every 12 months. Requesting your report from Equifax, Experian and TransUnion is the first step in credit repair. You have a few options for getting a copy.
The FTC instructs consumers to visit www.annualcreditreport.com for requesting credit reports online. It is the only website authorized by the federal government for such purposes, so be diligent and make sure you are using the right URL. Scammers often create similar-sounding websites or use “free credit report” in the URL to trick unwitting consumers.
Once you’ve verified your identity, your credit report(s) will be sent to you immediately.
You can also call 1-877-322-8228 and go through the verification process by phone. Your credit report will be mailed within 15 days of a phone request.
Download the official request form, print it and fill it out according to the instructions. Then mail it back.
Annual Credit Report Request Service
PO Box 105281
Atlanta, GA 30348-5281
Your credit report will be sent within 15 days.
One thing to think about is whether you want to request all three reports at once or stagger them over 12 months. The stagger strategy can help you keep a closer eye on changes in your credit report over the year. If you find an error in one report, though, you won’t know if it’s replicated in your other reports unless you check them, too. The bureaus don’t gather or report all the same information.
Step 2: Read the report line by line
Once you’ve got the hard copy, it’s time to dig in!
Don’t be surprised if you find it hard to read your credit report at first. Unless you have experience with such documents, it can look like a jumble of names, numbers and boxes.
Basically, it’s a summary of your accounts, payment history and other information reported by lenders and creditors. To help make sense of all that content, let’s break down what appears in a credit report (this example from Experian is useful in following along):
- Personal identifying information: Identity-related information like your name, address, Social Security number and date of birth starts off the report.
- Account information: These are records related to your credit accounts; broadly, this category covers type, age, ownership and payment status of accounts.
- Inquiry information: Hard and soft inquiries are listed out on your report. Soft inquiries don’t impact your score, but hard inquiries do and can remain on your report for up to two years.
- Bankruptcies: Any public records related to bankruptcy type and filing date will appear here.
- Collections: Past due accounts that are with collection agencies will be noted.
Step 3: Look for credit report mistakes
This step is where the real meat of the credit repair process is at: checking your credit report for errors.
WARNING: Credit report mistakes can come in all shapes and sizes, some of them not easily detectable. Here’s what to look for:
- Negative items that are outside the statute of limitations (i.e., older than seven years for most credit information and older than 10 years for bankruptcy information).
- Misspellings in your name or inaccurate personal information.
- Accounts that don’t actually belong to you or are mistakenly attributed to you.
- Closed accounts being reported as open, or accounts incorrectly listed as “closed by grantor.”
- On-time payments that were marked as late.
- The same debt being listed more than once.
- Accounts that were opened as a result of identity theft.
- Inaccurate or unapproved inquiry information.
- Wrong credit limit or paid balance amounts.
So how can you root out these errors? It’s going to take a very close reading of your report. Your credit repair to-do list should, at the least, include the following:
- Making sure your personal information is all correct and your file isn’t mixed with someone else who shares a similar name.
- Taking a fine-tooth comb to your account information, specifically looking at account number, status, individual vs. joint responsibility, open/close dates, credit type, term, highest and current balances, credit limit, monthly payment, late payments and statements or remarks.
- Verifying the origin of hard inquiries, confirming you gave your consent.
- Looking for bankruptcy information that is older than 10 years.
- Searching for anything else that may be reported incorrectly, as certain protections exist for consumers with active duty military status, for example.
Step 4: Dispute errors with credit bureaus
If you’ve found one or two errors, or three or four—or even 28, as the average customer for CreditRepair.com did in 2018—it’s time to dispute the inaccurate information.
A formal dispute consists of a letter you write to the credit bureau officially notifying it of the error(s). It helps to use a credit dispute letter template so you can make sure everything is in the right place. Your letter should include the following:
- Your personal and contact information.
- Each mistake you found and the outcome you desire, like removal or correction of inaccurate information.
- Copies of records, documents and other evidence showing credit report information is inaccurate or outside the statute of limitations. Never send originals!
- An annotated copy of your report, like red circles around suspect data.
Once the credit bureau receives the letter, an investigation will be started and you should have a response within 30–45 days. That means the credit bureau will either remove the information, correct it or confirm the negative information with its own evidence. It must also send results to you in writing.
Here’s contact information for the credit bureaus and options for getting the dispute process started.
Equifax Information Services LLC
PO Box 740256
Atlanta, GA 30348
Visit this page or
PO Box 4500
Allen, TX 75013
Visit this page or
Consumer Dispute Center
PO Box 2000
Chester, PA 19016
Visit this page or
Step 5: Dispute errors with lender
You will need to dispute inaccuracies with your original creditors as well, not just the credit bureau. This entails contacting the furnisher of the inaccurate data, usually the lender or creditor associated with an account. If you don’t dispute the information with the creditor, they may end up re-submitting the errors to the credit bureaus, resulting in it being re-added to your credit report.
The Consumer Financial Protection Bureau (CFPB) has some helpful resources on this front, including a sample letter you can send to businesses that supplied the information.
This step is very similar to disputing errors with credit bureaus. You’ll want to cover all the bases in your formal letter, including your contact information, clear identification of mistakes and copies of supporting documents. These companies are required to respond to disputes, so they often have a dedicated address for sending letters.
According to the FTC, if the information is found to be inaccurate, the provider may not report it to credit bureaus again.
Step 6: Build your credit
And there you have it—a step-by-step guide to DIY credit repair. But the task doesn’t exactly end there. It may take six months or more for any change to appear in your credit report and then later be reflected in your score.
In that time, you can still take more steps to build credit yourself. Monthly budgeting, making timely payments and not maxing out your credit cards are all good strategies for smarter personal finances. Understanding the five factors that go into your credit score—payment history, credit utilization, account mix, inquiries, and age of accounts—can also help you target areas for improvement.
Another thing to think about is preventative credit repair. Regularly reviewing your credit report can help you uncover inaccurate negative information more quickly. If you know it’s there, then you can better address it. Besides regularly reviewing your free copies of your credit report, consider signing up for Credit.com’s free Credit Report Card. We show you your Experian credit score, updated every two weeks. If your score falls, it could mean that it’s time to look more closely at your full credit report for errors and inaccuracies.
Want to learn more about the credit repair process and whether it’s worth working with a credit repair company? Visit Credit.com for more information, tips, articles and reviews of some of our favorite credit repair companies, like Lexington Law and CreditRepair.com.
Disclosure: Credit.com and CreditRepair.com are both owned by the same company, Progrexion Holdings Inc. John C. Heath, Attorney at Law, PC, d/b/a Lexington Law Firm is an independent law firm that uses Progrexion as a provider of business and administrative services.