The Official Guide To DIY Credit Repair

When talking to other people about credit checks and credit scores we hear all the time about how people are completely caught off guard by seeing what their credit score really is. The fact of the matter is that a lot of the times credit reports are littered with mistakes whether small inaccuracies or huge discrepancies. When comparing reports from the credit reporting agencies you will often come across these inconsistencies and realize that while you thought the only thing you’ve ever done wrong was forgetting to pay your phone bill once six years ago, the credit agencies think you’ve done a lot worse. Which goes to show why they are reporting your score much lower than you expected!

Credit repair is the process of ensuring accuracy and fixing inaccuracies in the information held by credit bureaus to right any wrongs and ensure that your reports are as honest as they should be. There are laws in place to protect you from these mistakes whether inadvertent or malicious. However, this is not an overnight fix. It can be and is often a time-consuming process that sometimes requires the help of professionals. Though if you stick with it, and improve your general financial practices in the future you can be sure to have a credit score worth bragging about.

How Do I Know If I Am In Need Of Credit Repair?

How often do you check up on your FICO score? If you’re like most citizens out there, not often enough. Most people don’t realize their credit score is low until they go to apply for a new line of credit whether it be a credit card, car loan, mortgage, etc.

One of two things usually ends up happening. You start being offered lines of credit with insane interest rates, or you won’t be offered credit at all (denied loans). When it comes to high-value loans like a mortgage, high interest can mean hundreds of thousands of dollars in extra total costs over the life of a loan. If you had a mortgage with a 4% interest rate on a $150,000 house the total cost of the home would be $257,804. That same mortgage with a 8% interest rate (very high) would have a total cost of $396,233. That’s a difference of $138,429. That’s almost the initial cost of the home itself in EXTRA payments just because of you having bad credit.

You should repair your credit now so when it comes time to buy you and/or your family a home you are not making your financial issues worse by becoming house poor. For the average person, buying a house with cash will never be an option for them. If you want to become a homeowner you will need to be able to qualify for a reasonable loan. It’s important that you take control of your credit sooner rather than later.

You Are Legally Protected!

You don’t need to look up and read any complex laws or regulations to understand your rights. Don’t let someone try to confuse you with any financial jargon.

You are legally entitled to one copy of your credit report absolutely for free each year. You will have to ask for it though. There are other scenarios that entitle you to an additional free report such as being a victim of identity theft, being unemployed, or being on welfare, etc. So any time that you are denied a line of credit whether from a bank for a car loan or mortgage or whether it be from something else, you should report a negative action against you in a 60 day time period and get a copy of your credit report.

While some companies may lead you to believe that you must pay a company for credit repair, please know and understand that you can repair your credit on your own. Whether you are a victim of fraud, mistakes, or even just outdated details it is your right to dispute and have these issues corrected. It is the duty of the reporting company to investigate and correct these mistakes. Don’t be afraid to reach out with a phone call and start the process. You are the only one who cares about your credit!

Hot Tip:
By requesting a free credit report from each of the three nationwide credit bureaus at DIFFERENT times you can stay up to date on your credit throughout the year and catch any potential issues as they come up.

Useful links:
Federal Reserve’s Guide to Credit Scores and Reports
FTC’s Guide to Your Equal Credit Opportunity Rights
15 U.S. Code 1679

Repairing Your Own Credit

family DIY credit repairRepairing your own credit can be an extremely daunting task. Before you begin you might want to meditate and get yourself into a “zen zone”. You will more than likely discover disgustingly inaccurate reports of your payment history as well as missing pieces of reporting that might have increased your score had they been included. Performing self-checks is a time-gobbling process that can absolutely be very rewarding but can also be extremely frustrating in the same right.

Once you’ve finished going through and marking up what you have discovered, you will wait weeks to months to hear back on the issue. If you think this is the path you’d like to pursue, follow on through this section. If you think you would rather have the help of a professional credit repair company, skip down to the section after this.

Step 1: Request All Of Your Free Credit Reports

Though we mentioned a hot tip was to stagger out when you request each of these that was in the case of monitoring your credit for possible issues. In the current case, we are mentioning if you are in need of credit repair. Remember you are entitled to one credit report per year per bureau absolutely free. Look into the Fair and Accurate Credit Transactions Act (FACTA) for further information as needed. The following links can be useful in helping you obtain a copy of your reports:

http://www.gpo.gov/fdsys/pkg/PLAW-108publ159/pdf/PLAW-108publ159.pdf (FACTA)
https://www.creditkarma.com/ (request your reports online)
Call 1-877-322-8228 to request your report(s) by phone.

Step 2: Comb through your reports

You should probably dedicate an entire weekend to this process. It’s going to be long, tedious, and sometimes frustrating to cross reference the reports not only with each other but with your own credit card statements and purchases.

The first thing you are going to want to do is to make sure all information regarding you as a person is accurate. You’d be surprised how often credit companies mix up two people with identical names. One Joe Schmoe with perfect credit can have a huge dent in his records due to Joe Schmoe the lowlife. The next thing you are going to want to do is to scrupulously comb through every item on each report and identify any misrepresentations, mistakes, or information that has been omitted. Finding things that have not been included requires you to have your own purchase history on hand (past credit card statements, etc).

On each of the three reports, there will be a section where the reporting company has identified possible issues that you can resolve. Please keep in mind that these are only issues that THEY have identified. You will also want to identify and correct issues you find on your own. Like we mentioned before, YOU are the only one who truly cares about your credit so put in the extra effort that the credit bureaus did not.

Some of the things that will be reported in these documents are personal information such as name, social, employment, etc. You’ll also get a list of any collections accounts you’ve had against you, ALL of your open and closed credit cards and any loans you have or had. Also annotated will be the number of times you’ve asked for new credit lines or credit reports.

While you are inspecting all of these documents you want to identify any discrepancies or inaccuracies in this information. Make sure there are not missed payments documented that never occurred, make sure that you have no credit cards that are opened that you thought were closed. Make sure all of the accounts listed are actually YOURS. If you do discover old credit card accounts that are open yet in good standing, do not jump to closing them. These accounts serve as proof that you can be responsible with a credit line. You will also want to make sure that all of your open accounts are listed on the reports and that none of them have been accidentally omitted.

Hot Tip:

Should you find any indication of fraud taking place on your credit lines, immediately contact the credit bureaus. You can actually configure an alert which forces a lender to contact you to confirm your identity before opening a new line of credit. While this won’t fix current fraud issues, it will stop the problem from escalating further.

Step 3: Send in any disputes

The final step to DIY Credit Repair is to actually file any disputes that you have come up with. Filing a dispute is 100% free to do (outside of the cost of postage, of course). When you file a dispute, it is the bureau’s duty to investigate said dispute within a 30 day time period. Review the law and remember that it is not your responsibility to gather and send documentation from your credit providers to the bureaus. Once a dispute is filed the provider will be required to send any documentation needed directly to the bureau on their own.

In the useful links below we provide an example letter for disputing credit report errors as recommended by the Federal Trade Commission (FTC). Attach all related and required paperwork to this letter to create a quality dispute packet, however NEVER attach the original documents. Always give copies of the documents when filing a dispute because the original copies are your leverage! It helps if you take a highlighter to the paperwork and mark problem areas to focus on. It may also be worth investing a few bucks into sending the packet via certified mail with a return receipt. This way you will have proof that the documents were received and will ensure the credit bureaus treat the packet with the respect it deserves.

Useful links:
Sample Dispute Letter
Dispute Experian Online
Dispute Equifax Online
Dispute Transunion Online

Step 4: Hurry up and wait

By law, a response must be issued within 30 days of receiving your dispute. You’ll want to allow about a 15-day buffer for any documents to be shipped out and go through the process of coming in the mail. You will receive an issuance of agreement or disagreement for each item that you have disputed in your claim. Receiving a disagreement does NOT mean that you should let it go and move on. You can re-dispute this item at a later date providing more supporting documentation.

If you have successfully disputed an item resulting in something being added or removed from your credit report, the bureau must provide you with an updated copy of your credit report. Upon your request, the bureau can also send correction notices to any lenders that you have tried to borrow from within the last 6 months. This should help to alleviate any current issues you are dealing with in trying to find a loan.

Hot tip:
Whether or not you win the dispute you have the option to place a “statement of dispute” on your report. While this does not remove or add items or even change your credit score, it does allow future lenders to see that you have been proactive in reviewing your credit and provided written documentation explaining your situation. This statement would show up on your report for the next 2 years.

If you have followed the steps above with maximum effort then you have done the best job you can at do it yourself credit repair. There’s not much else you can do without involving the help of a professional credit repair company. Below we will talk about how credit repair companies can help manage and expedite the entire process of fixing your credit.

Using a Credit Repair Company

Using a DIY credit repair guide like ours can surely help the process of fixing your credit score, however, it is definitely not a way for quick credit restoration. Doing it yourself requires a HUGE amount of persistence, effort, and resilience. A lot of people end up giving up on the process and accepting their poor credit score leading to a life of financial misery and ruin. Don’t let this be you! If you can’t handle the stress of doing it yourself, consider hiring a professional to help.

By paying someone to repair your credit now, you can save thousands if not hundreds of thousands of dollars in the long run. However you shouldn’t trust the first company you find online. At Credit Cage, we have sifted through hundreds of companies and have widdled it down to a list of the best credit repair companies in the market today. Don’t let yourself be taken advantage of, ensure that you use a reputable company so you can further protect yourself from even more credit problems.

By sticking with the businesses mentioned on Credit Cage you are making sure that you are going with a company that has been well reviewed and is a cut above the other legitimate credit repair businesses online.

When you go with a professional, you don’t have to worry about digging through endless amounts of paperwork. You are paying them to do that and also take care of the entire disputing process. The main “pro” to using an expert company vs going DIY is that a credit repair company can actually negiotate a lower payment on your current debt. Basically, if you think about the process of DIY credit repair and it makes you the least bit turned off or stressed, you should probably hand it over to a professional to handle for you.