DIY Credit Repair: How To Do It

Do-it-yourself credit repair is an alternative to using a professional credit repair service. You can save money by doing it yourself, but you need to know what you're doing. With a little bit of work, you can repair your credit and get back on track.

With our easy-to-follow guide, you can do it yourself and save money in the process. Let's go.

The Process of Repairing Credit Yourself

If you're looking to fix your credit yourself, there are a few key steps you'll need to take. By taking these steps, you can improve your credit score and make it easier to get approved for loans and other forms of credit in the future.

Access Your Three Free Credit Reports and Credit Score

The first step is to get a copy of your credit report from each of the major credit reporting agencies. You can get a free copy of your credit report from each of the three major credit bureaus every 12 months here at AnnualCreditReport.com.

Review Each Of Your Credit Report For Negative Items To Be Disputed

Once you have your reports, you can begin to identify items that are causing your score to be lower than it should be. This includes items such as late payments, collections, charge-offs, and more. There are a few negative items that can be disputed on credit reports in order to improve credit scores. These include:

• Incorrect personal data (names and addresses)
• Inaccurate account information
• Duplicate or missing accounts
• Late payments or delinquencies
• Charge-offs - if you have owed money to a lender but they have written the debt off as uncollectible, you may be able to dispute this and have it removed from your report.
• Collections - if you have outstanding debts which have been turned over to collections, you may be able to dispute these and have them removed from your report.
• Accounts closed by the grantor, which was closed actually by you.
• Public records - if you have any negative items such as bankruptcies or foreclosures appearing on your public record, you may be able to dispute these and have them removed from your report.
• Outdated items - negative items generally fall off of your report after seven years, so if you see anything older than that, it may no longer be relevant and can be removed.
• Inquiries - Inquiries are when creditors pull your credit report in order to decide whether or not to extend your credit. Too many inquiries can hurt your credit score. If you see an inquiry on your credit report that you do not recognize, you should dispute it.

Dispute False Items And Request To Have Negative Items Removed (Addresses and phones of the three bureaus)

The next step in disputing negative items on your credit report is to contact the credit bureau and the creditor directly. You can find the addresses and phone numbers for the three major credit bureaus below. Be sure to include your full name, address, and Social Security number in any correspondence.

Experian P.O. Box 4500 Allen, TX 75013 (888) 397-3742
https://www.experian.com/blogs/ask-experian/credit-education/faqs/how-to-dispute-credit-report-information/

Equifax P.O. Box 740241 Atlanta, GA 30374-0241 (800) 685-1111
https://www.equifax.com/personal/credit-report-services/credit-dispute/

TransUnion LLC Consumer Dispute Center P.O. Box 2000 Chester, PA 19016-2000 (800) 916-8800
https://www.transunion.com/credit-disputes/dispute-your-credit

By law, the credit bureaus have 30 to 45 days to investigate your claims and remove any inaccurate or outdated information from your report. And if you have a valid claim, your creditor may also be required to remove the negative item from your report.

Pay Off Any Late Bills And Debt

Late payments can damage your credit score. In fact, the longer an account goes unpaid, the more it will affect your score. This is why it's important to pay off any late items as soon as possible and make timely payments going forward.

One way to do this is by negotiating a "pay for delete" agreement with a collection agency. This is where you agree to pay the full or partial balance of an account in exchange for the agency removing the late payment from your credit report.

If you're looking to negotiate a pay-for-delete agreement with a collection agency, make sure you get a signed agreement from the collection agency before making any payments. Otherwise, you run the risk of the agency taking your money without following through on their end of the deal.

Maintain Low Credit Card Balances and Pay Down Accounts with High Balances

Your credit utilization is the amount of credit debt you have compared to your credit limits. It plays a big role in your credit score—accounting for 30% of your FICO score and 20% of your VantageScore. Because of that, it’s important to keep your balances low. High credit utilization can make you look like a risky borrower and lead to higher interest rates and rejected applications. There are a few ways to lower your credit utilization: paying down your balances, asking for a higher credit limit, or spreading out your debt across multiple cards. Whichever route you choose, keeping your utilization low is an essential part of maintaining good credit health.

According to a 2019 report from CNBC, the average American household has $5,700 in credit card debt.

Avoid Applying For Many New Lines Of Credit At Once, Instead Open a Mix of New Accounts Gradually

You may be tempted to apply for several new lines of credit at the same time, in order to take advantage of 0% APR introductory rates or other promotional offers. However, this can backfire on your credit score. Each time you apply for a new line of credit, the credit reporting agencies take note and factor it into your report as a "hard inquiry." Too many hard inquiries in too short a period of time can lower your score significantly. When you're looking to rebuild your credit, it's important to be selective about which types of credit you apply for. You'll want to open new accounts gradually so that you don't overwhelm yourself with too many new payments. Banks offer a variety of secured credit builder loans that can help you rebuild your credit. These loans are designed to be easy to qualify for and can help you establish a good payment history. When you're ready to start rebuilding your credit, consider opening a mix of new accounts so that you can slowly improve your credit score.

This means using a mix of different types of credit, such as revolving credit (like credit cards) and installment credit (like auto loans).

Keep Accounts Open

Though closing an account won't immediately hurt your credit score, keeping old accounts open and active will improve your credit history, and in turn, improve your score. This is because the age of your accounts counts toward your credit score - so even if you don't use an old account anymore, as long as it's in good standing, it will continue to boost your score. So if you're looking to improve or maintain a good credit score, it's best to keep those old accounts open.

How To Deal With The Negative Information On Your Credit Report

Different types of negative information stay on your credit report for different periods of time. You can find out how long each type of negative information will stay on your report by contacting the credit reporting agency. If you have negative information on your credit report, you may be able to request that it be removed. However, the credit reporting agency is not required to remove the information. If you are unable to have the negative information removed, you can work on repairing your credit by making timely payments and maintaining a good credit history.

How Negative Items Affect your Score And How Long Do They Stay on Your Credit Report?

When you're trying to improve your credit score, one of the first things you'll want to do is understand how long negative information stays on your report. This will help you know what to expect and give you a timeline for taking action. There are generally two types of negative information: derogatory and negative accounts. Derogatory information includes things like bankruptcies and foreclosures, while negative accounts are late payments or accounts in collections. Derogatory information generally stays on your report for seven years, while negative accounts usually stay on for seven years from the date of the last activity. However, there are some exceptions to this rule. For example, if you dispute an item on your report, it may be removed sooner.

For example, generally speaking, bankruptcies remain on your report for up to 10 years.

What Negative Information Can You Remove from Your Credit Report?

There's a lot of misinformation out there about what you can and can't do when it comes to negative information on your credit report. The bottom line is this: you can't remove accurate, negative information from your report. However, you can dispute inaccurate or outdated information with the credit bureaus or your creditors and request that they remove it. If you have negative information on your credit report that is accurate but no longer relevant (for example, an old collections account), you can try to negotiate with the lender to have it removed. In some cases, they may be willing to do this if you agree to enter into a payment plan or otherwise take care of the debt. Whether you're trying to remove inaccurate information or negotiate for the removal of old debt, remember that persistence pays off. If at first, you don't succeed, keep trying until you get the results you want.

When Should You DIY Credit Repair?

The answer is: it depends. If your credit problems are relatively minor, such as a few late payments or a small collection account, then you may be able to fix them on your own without too much trouble. However, if your credit issues are more serious, such as multiple late payments, collections accounts, charge-offs, or public records, then you may need to seek professional help. This is because these types of issues can be difficult to fix on your own, and they may require negotiation with creditors or the credit bureaus. So, if you're not sure whether you can handle credit repair on your own, the best thing to do is to consult with an experienced credit repair company. They will be able to assess your situation and advise you on the best course of action.

Where Else Can You Get Credit Repair Help?

• National Foundation for Credit Counseling (NFCC)
• Federal Trade Commission (FTC)
• Consumer Financial Protection Bureau (CFPB)
• Better Business Bureau (BBB)

Takeaway

If you're serious about credit repair, then you need to be vigilant about checking your credit report for inaccurate items. By regularly monitoring your report and working to remove any inaccuracies, you can ensure that your credit score stays high. DIY credit repair is possible with a little time and effort - so don't wait, get started today! And remember that repairing your credit is a marathon, not a sprint. It will take time and effort, but it is possible to improve your credit score.