Do-It-Yourself Credit Repair (Without Spending a Dime)

Do It Yourself Credit Repair

Michael Delgado, a Social Media Community Manager at Experian, is the author of this post. Michael helps promote financial literacy on Experian social channels and writes for the Experian news blog.

Do you check your credit reports regularly? Credit reports are your credit references, as reported by your lenders. And, unfortunately, some lenders may accidentally report inaccurate information about your payment history. This is why it’s important for everyone to monitor their credit reports regularly and to dispute any information that is inaccurate. Today we wanted to show you a complete guide to do-it-yourself credit repair.

If you ever need to fix your credit report, here are the steps to take (and online apps you need) to get your credit report updated quickly – without paying hundreds or thousands of dollars to “credit repair” clinics:

Step 1: Request your free credit report from each credit bureau

The Fair and Accurate Credit Transactions Act (FACTA) entitles you to one free credit report each year from Experian, Equifax, and TransUnion and you can get this through AnnualCreditReport.com or by calling 1-877-322-8228.

In addition, you may request a free report directly from the credit reporting companies in certain circumstances. “Under the Fair Credit Reporting Act, consumers who receive public assistance, are unemployed (and seeking employment), or believe their credit report contains fraudulent data, are also entitled to a free report,” says Maxine Sweet, Vice President of Public Education at Experian.

Request your free credit report from each bureau

CREDIT TIP: You can keep a close eye on the credit activity that is being reported for you simply by requesting a free credit report every four months. For example, get your Experian Report in January, Equifax in May, and TransUnion in September.

Step 2: Audit your credit reports carefully

“Remember that credit report information comes from the companies who have accounts with you. The goal is not just to fix your credit report, but to make sure that your information is correct with the source so that it will be reported correctly to everyone who checks your credit references. Reviewing your credit report can help you discover and resolve those inaccuracies,” says Sweet.

Each credit report differs in how information is presented, but here’s a breakdown of what you’ll typically find:

  • Personal  Identification (addresses, employment history, name, social security number)
  • Types of Accounts (revolving, installment, loans, joint accounts, credit limits, debts)
  • Collections (if any accounts went to collections)
  • Public Records (about  financial obligations)
  • Consumer Statement (such as a statement of dispute if you do not agree with your lender about the status of your account)
  • Hard Credit Inquiries (showing you applied for new credit or services)
  • Soft Credit Inquiries (showing requests made by lenders who sent you an offer or that you requested your own report — soft inquiries are shown only to you)

Here’s a sample credit report [pdf] from Experian explaining the different parts of your report:

Audit your credit reports carefully

As you audit your credit report, pay close attention to these areas:

Missed Payments
Your payment history makes up the biggest part of your credit scores, so any past-due amounts or late payments will damage your scores (especially missed mortgage payments). If you have any missed payments on your report that are incorrect, make sure to dispute the inaccuracy because it can make a big impact on your scores. You may need to talk to your lender to find out why your records do not agree about the payment.

Length of Time Using Credit (Depth of Credit)
Many people don’t realize that older credit accounts with good credit history actually help you. It shows you have managed credit well for a significant amount of time. Consider the pros of cons before you close any accounts (if they are tempting you to overspend).

The Variety of Accounts
Having a mix of different credit accounts can help you because it shows you know how to manage different types of credit. Managing a car loan with a fixed monthly payment is very different from managing a credit card where you control the amount you owe and pay each month.

Recent Credit Accounts
If you’ve recently taken out a loan or credit card, you’ll want to make sure it’s appearing on your credit report. New credit accounts can signal risk (and could lower your scores at first), but the added credit mix and consistent payment history will likely improve your scores over time.

Amount of Credit
It’s important to make sure you’re using less than 30% of your available credit on revolving credit accounts. For example, if you have a $10,000 credit limit on a credit card – you never want to carry a balance over $3,000 because it can hurt your credit scores. The lower, the better. 

So while auditing your credit report, make sure the credit limit assigned on your revolving accounts are accurate – and the amount owed is under 30% of your credit limit. If not, consider requesting a higher credit limit on that credit card to lower your utilization rate. Even better, pay down your balances so that you are only charging what you can pay in full each month.

CREDIT TIP: If you notice any fraud, you can set a fraud alert right away which cautions lenders to verify your identity before opening any new credit accounts. It’s simple to set-up fraud alerts by using  these  direct links to ExperianEquifax, and TransUnion. “You can also freeze your credit reports for a small fee to prevent new creditors from accessing your report. However, freezing your credit reports means you will have to temporarily unfreeze them when you need services, which can be inconvenient,” says Sweet.

Step 3: Dispute incorrect data

There is no cost to dispute any items on your credit report. And you can dispute incorrect information in a variety of ways. Always start with a current copy of your credit report. Then, you can call the phone number on your credit report or use one of the following online apps from one of the following credit bureaus:

Experian credit dispute app

Screenshot of the Experian Credit Dispute App

Equifax credit dispute app

Screenshot of the Equifax Credit Dispute App

TransUnion credit dispute app

Screenshot of the TransUnion Credit Dispute App

“In most cases, you only need to ask one credit bureau to dispute an account on your behalf .. If your lender responds to a disputed item with a correction, they are required to report that corrected information to any credit reporting company to which they provide their data,” according to Sweet.

Some people think that disputing information on your credit report can hurt your credit scores, but that is not true. Disputes are not reported in your history and are not scored.  Disputing inaccurate information is exactly what you should do to help ensure your credit history is correct.  Another myth is that disputing information you believe is inaccurate will cause info to remain longer on your credit. Information is deleted based on the dates of missed payments or when the account was closed, for example.

CREDIT TIP: If you cannot resolve a disputed item with your lender, you may add a “Statement of Dispute” to your credit report explaining  why the information is incorrect. The statement you write must be under 100 words, and should address why the info the lender is reporting is incorrect. For example, “Never missed any payments with [Lender Name].”  This statement will remain on your report for two years and visible to anyone who has permission to review your report.

Step 4: Wait 30 days for removal or response from creditor

When you dispute an item on your report, the credit bureau will contact the creditor to respond to the dispute. If no response is received within 30-45 days, the credit bureau will remove the account or correct the negative information and notify you of the results.  “If you disagree with the results, you may need to contact the creditor directly and provide additional documentation if your records do not agree with theirs,” says Sweet.

CREDIT TIP: If you need additional help with debt or your credit, avoid going to a “credit repair clinic,” which could cost you hundreds (if not thousands) of dollars. Instead, seek out an accredited non-profit credit counseling agency. And, if you know of a great non-profit credit counseling agency, please share in the comments.

Step 5: Request a new credit report from each credit agency

After an item is corrected with one credit reporting company, wait three or four weeks before requesting a fresh credit report from the other credit bureaus. You want to give the creditor some time to report the correcteddata. Getting a fresh report will ensure that the item has been removed or updated. You may also choose to purchase a  credit score to see if your risk level has improved.

We hope these tips on do-it-yourself credit repair are helpful! If you ever have any specific questions about your Experian credit report, check out the Ask Experian blog for answers to common questions. And join our weekly Experian #CreditChat on Twitter with credit experts Maxine Sweet and Rod Griffin.

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  • John S @ Frugal Rules

    Good write up! I have to regularly check my report as I am a Jr and have had several times where my Dad’s info might be included on mine. It can be a hassle to take care of, but well worth it in the end.

    • http://www.twitter.com/bwfeldman Benjamin Feldman

      I never thought about the “Jr.” thing being a cause for credit confusion, but now that you mention it I can totally see how that might happen. Glad to hear you’re on top of it!

      • http://www.growingfamilybenefits.com/ Kevin Haney

        Most banks routinely ignore any Jr. Sr. reports in pre-screens for this very reason.

  • http://twitter.com/StumbleForward Chris Holdheide

    That’s pretty good tips Ben. Annual Credit Report is a great source to get all 3 free credit reports however you will have to pay to see the scores though. This is why I go to sites like Quizzle and Credit Karma because they will show me my score for free.

    • http://www.twitter.com/bwfeldman Benjamin Feldman

      Yes, I use Credit Karma as well to keep tabs on my score. Thanks, Chris!

  • carol opiyo

    Thanks for the informative article Ben. I have a question. If I use
    up over 30% of my credit limit but pay the balance before the credit
    card company reports the balance to the credit bureaus will that still affect my credit negatively or will it be okay since they will be reporting zero balance. Thanks.

    • http://www.twitter.com/bwfeldman Benjamin Feldman

      In that case, there would be no negative affect on your credit because it would be completely paid off (0% utilization) by the time they even were notified. So not to worry!

      • carol opiyo

        Thanks a lot!

  • Marnica Jeanpierre

    I disputed an inaccurate judgment on my transunion report and it was removed. Will I have to dispute it on Equifax and Experian as well or will it delete it there as well ?

    • http://www.twitter.com/bwfeldman Benjamin Feldman

      Marnica, my understanding is that if the inaccuracy appears on the other two reports you will have to dispute it with those two bureaus as well. But I hope I’m wrong, for your sake!

  • Rusty Bittner

    What if you don’t know if something on your credit report is wrong and needs to be disputed. I was never that good at keeping track of my finances and after suffering a head injury while serving in Iraq, I have trouble remembering most things. What can I do..Please help

    • http://www.twitter.com/bwfeldman Benjamin Feldman

      Hi Rusty, the first step would be to get each of your 3 credit reports at https://www.annualcreditreport.com/. Then look through them and see if anything is listed that you don’t recognize. If you’d like help with this, please email me at Ask@ReadyForZero.com. Thanks! Also, thank you for your service and I’m sorry to hear about your injury. Do you have someone to help look after your finances?

  • jtwebber

    how can I fix my credit

    • http://www.twitter.com/bwfeldman Benjamin Feldman

      Hi there, our credit score resource center may be able to help you: blog.readyforzero.com/resources/credit-score.

  • Mike

    Can I dispute legitimate items so they be off my credit sooner or do I have to wait?

    • http://www.twitter.com/bwfeldman Benjamin Feldman

      If an item is legitimate, then it will stay on your credit report for the usual time (up to 7 years, depending on the item).

  • tree06

    What about credit that is a few years old? I have hear the term “fall off the report”, what does that mean? If some items are say 7 years old, is it worth addressing them or letting them get removed from your report?