How to Repair Your Credit

The first step in gaining control over your finances is to evaluate your current position and an important art of this process is to assess your credit score. Almost always, it comes as a shock to you when you get your credit scores and you realize that they are far worse than you thought. Yes, you were aware that you had a couple of bills pending, some credit card dues building up and a few utility bill payments unpaid. But you had no idea they could lead to such a bad credit score. The thing is that it is not just your carelessness in making payments that can impair your credit score. There may be mistakes in the report that are pulling the score down too. Take a closer look at the score and you may find small errors, mismatches between the different reports, maybe major mistakes too. You need to repair these as early as possible!

What exactly is credit repair and why is it so important?

The steps you take to correct and restore your credit history information that the credit agencies have is called credit repair. Thankfully, the law is on your side on this one and you have a right to get all errors rectified in your credit score so that an accurate picture of your credit standing is established.


The challenge is that credit score repair can take a while and some paperwork may be required. But stick with it, because it is totally worth your time and effort. What you need is patience and attention to detail, especially when you are assessing your credit score to see if any errors are evident. Once your credit score is accurate and you have learned to handle your finances better, you will start to see the improvement in your credit score quickly.


Let’s see why credit repair is so important and why you should be prioritizing it. The sad thing is that most of us don’t take our credit score or FICO score very seriously at all. The when we are planning to make a big purchase and we need a loan, the lenders take one look at the credit score and jack up interest rates sky high. Result, you can’t get a reasonably priced loan. You may have faced this problem when you were trying to get a credit card too.


Now, if you don’t have a choice and you do take the loan at sky high rates, you end up paying more than you need to throughout the duration of the loan. That means, your hard earned dollars are flowing out like money, totally unnecessarily. If only you had a good credit score, you would be saving so much money month after month.


There is another side to this problem too. If your credit scores are sufficiently bad, your lender may simply refuse to give you a loan. Then how do you pay for the expense you need to meet?


There is no question that credit repair should be Number 1 on your list of things- to- do and you should get it NOW! This is particularly true if you intend to buy a house or yacht or renovate in the coming months, or undertake any task that will require you looking for loans.

Your Legal Rights

Before you can start looking for ways to improve credit score or repair credit score, you should be aware of your legal rights. Don’t worry, we won’t bore with a lot of incomprehensible legalese. It’s quite simple actually. Let’s start with accessing your credit report.


  • You can get your credit report FREE from each of the three credit reporting agencies once every year. Ask for it because they will NOT be sending it to you on their own.
  • If you have applied for a loan and your bank or other lender or even your employer rejects your application, you are entitled to a free credit report as soon as you report this within 60 days of this ‘negative action’.
  • Those who are unemployed or receiving welfare get an additional free report.
  • If you have been on the receiving end of identity theft or any other fraud that impair your credit score, you get an additional free report.


Now, what are your legal rights with respect to repairing your credit score and correcting it? First, you cannot be charged or punished for investigating or correcting your credit report. It is your right to dispute misrepresentations and mistakes, or even outdated information on your credit report and also point out fraud. The credit reporting company is legally bound to research and correct the mistakes you point out. If you spot mistakes, contact the bureau and the information provider immediately and ask for corrections to be made immediately. This is your right.


Handy Tip: Get your credit report from each of the bureaus at different times of the year so that you can track yours core all year long.

Keep in mind that you may find some grossly misrepresented facts in your credit report or just a number of minor mistakes that drastically affect your score. You may also find that positive information is missing (like repayment of debts) and this is the reason for your low score. Auditing these reports can be very frustrating and tedious but doing it is a critical first step for you so do not ignore this step. You can ask a reputable credit repair company to step and take over this time consuming task for you too. But if you are doing it yourself, here is some more information that will help.

Once you have all three reports from the different credit bureaus, you can compare the side by side to spot differences quickly. Apart from this, there may be other mistakes too and you should get to those next. Now, when you are comparing the credit reposts side by side keep these in mind:


  • Check if all your information is correct in each of the reports
  •  Go through each and every item to the report and see if it accurate. You should watch out for errors, wrong calculations, or missing information.
  •  Each report may have its own unique set of issues that need correction so list them out for each of the reports.
  •  Double check everything and verify that all information (such as payments made by you) is recorded without fail.

What you should expect to see in your credit reports:


  •  Information about your identity, any past addresses, employment history, and your social security number
  •  What types of accounts you have with banks or various companies
  •  What loans or debts you have
  •  Any accounts of yours sent to collection agencies
  •  Any requests for lines of credit or loans
  •  All requests by third parties (lenders/ employers etc.) for your report

A good strategy is to start with the negative items listed. If you find items here that are incorrect, say missed payments that you have actually paid on time, add this to the list of problems.


Check your open accounts (loans/ other debts and due balances) and verify that the age of the accounts and the balances are accurate.  Remember here that old accounts that show positive activity such as timely repayments, improve your credit score so do not get them removed in a hurry. They are proof that you can responsibly manage your debt.


Ensure that all of your accounts are listed because the presence of many debts that you are regularly paying off on time is a good indication of your credit worthiness.


Handy Tip: If your credit is being used by a fraudster, intimate your credit bureaus immediately and ask them to issue a fraud alert.  This ensures that lenders check with you and verify your identity before opening new accounts on your name. This puts an end to fraudulent activities where someone has stolen your identity to get loans. If you have sustained a huge hit to your credit score thanks to fraud, you can also ask to freeze the credit reports until you have completed restoration and repair.

The next step: Filing your disputes

You can file your disputes with the credit bureau for free. Once you have filed an issue, the bureau has to investigate it within 30 days. The bureau investigates the information provider who has provided the information that you say is false. If an error has occurred here, the information providers are bound by law to intimate all three credit agencies and give the correct information so you do not have to contact all three bureaus on your own.


One important thing to remember: Don’t give out original copies of any documents you have as proof of inaccuracies or false information.  Retain these for your records and only give out copies. What you can also do is highlight the mistake in the credit report copy and sent hat in with a letter. If you send your letter by certified (return receipt requested) it is easier for you prove that you raised a credit repair request with proof of inaccuracies.

And now, you wait

Once a request for correction is received, the credit bureaus have to investigate it and get back to you within 30 days.  It’s a good idea to wait 45 days to actually get the response by mail before you write back to them. In any response you get from the credit bureaus you can expect their clarification about each item you marked off. They may tell you that the mistake was corrected or your stance is wrong. If they do not agree with you, find more proof backing your point and write back to them again.


In case, some of the changes you asked fro have been made, you will get a fresh, corrected copy of your credit report.  By law, any entries that have been changed or removed from the report cannot be added back to it without showing you proof to back the addition or change and without proof from the information provider. It is also your right to ask for the corrections to be intimated to anybody who has requested your report over the past month period.


Hand tip: There may be instances where the information provider holds that the information he provided is correct and based on this; the credit bureau rejects your correction request. In such cases, you can ask for a statement of dispute to be placed on the credit report. At least this will let future lenders know that some discrepancies exist in the credit report. They may factor this in when deciding your loan application. These statements of dispute appear on your credit report for two years.


Now you are done with the credit repair process and you should see your accurate credit score reflecting on your reports from all three bureaus. Many people cannot do this on their own either because of lack of time or because they do not know how to go about it. For such people, the best option is to contact a credit repair expert who takes on this tough task on your behalf.


Parenting with Credit Repair Experts

Credit repair is a long winded process and the time consumed to improve your credit score can be substantial. There is no easy way to do it. You do need to have a lot of patience and focus to get the job done and this may not be everyone’s cup of tea. That is why many people leave this job to the professionals.


What you should be aware of is that there are many scams in this area so giving your credit repair task to a third party is not a split second decision that you should be making. There is a real risk that you could be handing over some sensitive information to fraudsters. Trust only reliable, reputed experts to do this job for you.


The good thing about roping in experts is that you can have the pros analyze your credit report, give you advice and guidance about restructuring your financial spending, help you make a realistic budget, take on the credit score  repair process and also negotiate with lenders for  debt reduction or debt consolidation. In short, they can do everything necessary to bring your finances back on track and out you firmly on the path to financial freedom.


Correcting your credit report is just the first step if you want to improve your credit score. While you are rectifying the report, you should also make sure that your current bills are all being paid on time every time. This includes loan repayments and other dues too. Any debts that you have need to paid down as quickly as possible starting with the costliest ones. These steps ensure that your credit score is not just accurate but that it improves with time. A good rule of thumb is to never have a debt balance that exceeds over 30% of your overall credit limit.  Go above this and you risk lowering your credit score.


With the right kind of focus and hard work, you can surely fix your credit score and maintain high ratings over the long-term. Get your family members and friends involved in your budgeting activities and enlist the help of professionals in correcting errors on your credit report.  In time, you will be able to get loans at the best rates without compromising on your ability to save for your future.