Credit Repair Companies: Are They Worth It or Can You Do It Yourself?

Hey there! So, you’re thinking about fixing your credit and might be wondering about those credit repair companies that promise to boost your score for a fee. Let’s dive into what they do, whether they’re worth it, and how you can take charge of your credit repair journey yourself—saving some cash in the process.

What Are Credit Repair Companies, Anyway?

Credit repair companies are businesses that claim they can improve your credit by removing negative items from your credit reports—for a price. They’ll review your credit reports and dispute items they believe are inaccurate or outdated on your behalf. Sounds tempting, right? But here’s the kicker: You can do everything they do on your own, for free.

The DIY Approach to Credit Repair

Taking control of your credit repair isn’t as daunting as it sounds. Here’s a step-by-step guide to help you navigate the process:

1. Get Your Free Credit Reports You’re entitled to a free credit report from each of the three major credit bureaus—Equifax, Experian, and TransUnion—every 12 months. Grab yours at AnnualCreditReport.com.
2. Review Your Reports Thoroughly Look for errors like incorrect personal information, accounts that aren’t yours, or negative items that should’ve aged off. Even small mistakes can impact your score.
3. Dispute Inaccuracies If you spot errors, you can dispute them directly with the credit bureaus. Each bureau has its own process:
   • Equifax: Online Dispute Form
   • Experian: Dispute Center
   • TransUnion: Dispute an Item
   Provide as much detail and documentation as possible to support your claim.
4. Address Legitimate Debts For debts that are accurate, focus on paying them down. Start with accounts that are past due to bring them current. Setting up payment plans with creditors can also be a helpful strategy.
5. Establish Positive Credit Habits
   • Pay Bills on Time: Your payment history is a significant factor in your credit score. Consider setting up automatic payments to avoid missing due dates.
   • Keep Balances Low: Aim to use less than 30% of your available credit. This shows lenders you’re managing credit responsibly.
   • Limit New Credit Applications: Each application can result in a hard inquiry, which might lower your score slightly. Only apply for new credit when necessary.

Pro Tips and Resources

• Goodwill Letters: If you’ve had a late payment but have a good history with the creditor, consider writing a goodwill letter asking for the negative mark to be removed. Learn more here.
• Credit Counseling: Nonprofit credit counseling agencies can offer guidance and may help you set up a debt management plan. Check out the National Foundation for Credit Counseling for reputable counselors.
• Stay Alert for Scams: Be cautious of any company that promises a quick fix or asks for payment upfront. The Federal Trade Commission provides insights on spotting and avoiding credit repair scams.

Bottom Line

While credit repair companies offer services that might seem convenient, everything they do, you can do yourself—for free. It might take some time and effort, but taking control of your credit repair journey empowers you and saves you money. Remember, improving your credit is a marathon, not a sprint. With patience and persistence, you’ll see progress.

For more information on Credit related topics be sure to check out Our Blog!

For a visual guide on repairing your credit, check out this helpful video: