Credit Repair

Steps for Credit Repair

No matter what anyone says, credit repair is a long and labor-intensive process. It takes elbow grease – but credit repair works.

Bad credit repair can be done on your own or with a credit counseling/credit repair company.

Credit Repair Companies

There are many credit repair companies out there. Many credit repair companies claim quick fixes, claim that they can delete information from your credit score, claim that they can create you a new identity.

These companies are most likely lying. According to the FTC (Federal Trade Commission), companies that make these claims are not legitimate.

However, if you are having trouble with debts or having trouble fixing your credit score or repairing credit reports, you should contact legit credit repair companies or a credit counselor. These professionals may not be free credit repair services but they can set you on the right road to creditworthiness.

Do  It Yourself Credit Repair

Bad credit repair is relatively easy to accomplish on your own. Here are some simple steps to repair your credit:

  1. Get a Free Credit Report
  2. Dispute Errors on Your Credit Report
  3. Dispute Errors with Your Creditors
  4. Pay Your Debts

1. Get a Free Credit Report

If you have a bad credit score or have received a bad credit report that needs repair, you need to get a free credit report.

You  get 1 free credit report from each credit reporting company every 12 months.  The credit reporting companies are:

  • Equifax
  • Experian
  • TransUnion

There are several other ways to get a free credit report:

  • If you're unemployed and looking for a job
  • If you're on welfare
  • If you've suffered identity theft

The other way that you can get a free credit report is if a company has taken an adverse action against you based on your bad credit.

An adverse action is a denied loan application, a denied job application – anything that is denied to you because of bad credit is an adverse action.

You will receive notice of the adverse action, alongside the name and contact information of the credit reporting company (Equifax, Experian or TransUnion) that made the bad credit report.

2. Dispute Errors on Your Credit Report

Once you've received notice of an adverse action or you've noticed something incorrect on your credit report, it's time to start credit repair.

Before you start to repair credit, remember that you cannot remove negative accurate information from your credit report. The only information that can be legally removed from your credit report is incorrect or inaccurate information.

Also, remember that even though there are only three nationwide credit reporting companies, Equifax, Experian and TransUnion are independent companies. Just because one company has an error doesn't mean the other credit reporting companies have errors. Don't send letters to credit reporting companies that haven't reported bad credit errors.

You should send a letter via certified mail to the specific credit reporting company that has incorrect or inaccurate information. You should copy and attach to the letter documents that show the information is incorrect. Also, include a copy of the bad credit report with incorrect information clearly shown.

Here's a checklist for the disputing process for bad credit report repair:

  • Cover Letter Explaining number of disputes
  • Certified Mail
  • Return Receipt Requested
  • Copy of Credit Report with disputes clearly indicated
  • Copies of all documentation of disputes (receipts, payment records, court documents, etc)

You should only send copies of all the documents enclosed and attached to the letter. Keep all the original documents with you, including the:

  • Cover Letter
  • Certified Mail Receipt
  • Return Receipt
  • Credit Report
  • Documentation of Errors

The credit reporting companies are required to investigate and solve the problem if they are incorrect or inaccurate within 30 days (unless they think your claim is frivolous). They must send you all the relevant information from their investigation and a free copy of your credit report in writing.

Your responsibility to repair your credit is to clearly report and dispute errors.

If the credit reporting company does not accept your dispute or change the information on your credit report (they think your claim was frivolous, your dispute was not documented, your dispute was incorrect, etc), you can still request that the credit reporting company add a summary of the dispute to your credit report file.

Here is a sample dispute letter that you can use for credit report repair.  Everything that you should change is [bold and enclosed in brackets].

Sample Dispute Letter


[Your Name
[Your Address]
[Your City], [Your State], [Your Zip Code]

Complaint Department
[Name of Credit Reporting Company]
[Credit Reporting Company Address]
[City, State, Zip Code]

Dear Sir or Madam:

I am writing to dispute the following information on file. The items I dispute are also indicated on the enclosed copy of my credit report.

Item 1: [title of item as disputed on the credit report]

This item, [title of item as disputed on the credit report], is [inaccurate/incomplete; use whichever is appropriate] because [why]. I am requesting that the item be [deleted/changed] to correct the information.

[If applicable, use the following sentences] Enclosed are copies of documents supporting my position.

Item 2: [title of item as disputed on the credit report]

This item, [title of item as disputed on the credit report], is [inaccurate/incomplete; use whichever is appropriate] because [why]. I am requesting that the item be [deleted/changed] to correct the information.

[If applicable, use the following sentences] Enclosed are copies of documents supporting my position.

[repeat paragraphs as necessary.]

Please investigate this matter and [delete/correct] the disputed item(s) as soon as possible.

[Your name]

Credit Report
[title of documentation for item 1; repeat as necessary]

3. Dispute Errors with Your Creditors

If you have successfully disputed an item (or while you are disputing an item), you can tell the creditor that reported the item about your dispute. The credit reporting company should let you know who reported the disputed item on your credit report and their contact information.

Remember to use copies of documents and not originals to substantiate your position. Once the item on your credit report is successfully disputed, the creditor cannot report the disputed item again.

If you send your creditor evidence that the item they reported is inaccurate or incorrect, they also have an obligation to correct your credit report.

4. Pay Your Debts

You can also repair credit by paying off your debts.

Good budgeting is essential to credit repair. Total all your monthly expenses and compare it to your income. Determine what your necessary expenses are and how much you spend on them.

Necessary Expenses

  • Food
  • Shelter
  • Health care
  • Insurance
  • Clothing

Once you've determined what you need to survive, develop a plan to pay back your creditors. Any amount that you pay to your creditors will help your repair your credit score and credit report. Credit counselors are a great resource for helping with budgeting.

You can also contact your creditors to see if they can modify your payment plan (or create a payment plan) to help you continue to pay down your debt.  Your creditors would rather you pay them something rather than nothing. Creditors also do not want to turn your debt over to a debt collector – because that means that they aren't getting paid in full.