DIY Credit Repair Tricks

Anelle Valdes
hand builds a ladder from wooden blocks

We’ve all heard them. The advertisements on television that suggest you can repair bad credit “by calling this number.” It may be hard to believe, but you don’t have to call anyone to start repairing your bad credit all on your own. Here’s how to get started!

Determine your starting point.

The first thing to do is to contact all three credit bureaus (Experian, TransUnion, and Equifax) and request copies of your full credit reports. You can get all your reports, in full, for free, once every year by going here. You can also try Credit Karma or Credit Sesame, and access your reports online for free at any time! Once you have your credit reports in front of you, take stock of your overall standing. Scores range from 300 to 850, and anything around 700-740 is generally considered “good.”

Dispute errors.

Errors are not common, but they can happen. Generally, if bad credit is your fault, you will know it. Don’t make a point of arguing accurate information, but if you do happen to see any errors, it is important to bring attention to them right away.

You will want to make a copy of the report so you can highlight the error on one, and then gather some information to prove your case. Bank account statements are a common item to use as evidence, so be sure to make copies of these as well. Then send a letter to the credit reporting agency in question, explaining the mistake and including your highlighted copy of the report along with your proof. While the bureaus sometimes allow you to submit disputes online, it is still better to send your claim by certified mail, with a duplicate for yourself. This way, you can keep track of the 30-day window that the bureau has to respond to your dispute. Here’s the phone numbers and websites for each of the three bureaus, so you don’t have to hunt them up on your own. We’re all about saving you time and money.

·         Experian: 1-888-397-3742

·         TransUnion: 1-800-916-8800

·         Equifax: 1-800-685-1111

Stop the hemorrhaging.

Once you’ve dealt with any errors on your credit report, it’s time to make sure you are living entirely within your means. This is highly important, because there are only three things you can do to repair bad credit.

You have to:

  • Pay all of your bills on time.
  • Pay down your debt, especially credit card debt.
  • Avoid applying for new credit.

Start by crafting a budget. You can begin by going over your tax returns for the past year or two to get a handle on how much money you actually take home each year. Then, subtract your monthly expenses, and then estimate your other monthly spending habits. Create a limit for each category of extraneous expenses that changes each month, like groceries, gasoline, and entertainment. You want to try to pare down expenses wherever possible, to free up some cash for repairing your credit.

Once you’ve done this, pay all of your bills on time, from here on out. Don’t make any more excuses, because on-time payments are the single most important factor for your credit score.

Then pay down credit card balances and other outstanding debt. Do not spend any more on your cards, if you can avoid it, so that you can focus on trying to zero out your balances. Avoid canceling your cards, because even when you eventually owe nothing on them, your available credit reflects well on your score.

Do not apply for any new credit, as tempting as that may be. Every time you apply for any new line of credit, it is considered a “hard inquiry,” and credit bureaus look back two years for how many hard inquiries you’ve authorized. Once your credit is back up in good standing, a few hard inquiries each year won’t generally affect your credit. But a lower-than-average credit score sees more impact from even just one inquiry; so just sit back and hold on to your excitement.

There you have it! Do-it-yourself credit repair! Don’t worry; you can do it, and we’re all rooting for you!

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