How to Rebuild Your Credit With No Upfront Fees

Some credit repair companies ask for high upfront fees to wipe out bad credit, but the Federal Trade Commission (FTC) explains that this is illegal. A credit repairer cannot collect any money from a customer until it performs its job. Unscrupulous firms ignore this requirement and usually do not fulfill their promises. You can rebuild your own credit without paying anyone because you can use the same methods as legitimate repair companies and some financial actions of your own.

Instructions

1

Pay all of your current credit cards, loans and other accounts by the monthly deadlines. Timely payments play a big role in your credit score, according to the FICO scoring company. Your score goes up as you rebuild your on-time payment records and your account balances go down.

2

Request credit report copies from the federal website run by Experian, TransUnion and Equifax, AnnualCreditReport.com. The credit bureaus all sell reports, but the Fair Credit Reporting Act forces them to give consumers a free annual copy through the special site, the FTC explains. They will charge you or make you sign up for paid services like identity theft protection if you order reports through their direct websites.

3

Read the reports to make sure your current on-time payments are showing up. They do not help rebuild your credit score if they are not being reported by the creditors. Call any lenders who are not sharing positive information with the credit bureaus and ask them to do so.

4

Circle any harmful credit report items that contain mistaken information. Dayana Yochim of the Motley Fool financial education website warns that eight out of 10 reports have errors, most of which are tied into late payment dates. You can dispute any error, including general issues like misspellings, and it may get the item removed from your reports if the creditor does not cooperate with the credit bureau investigation of your challenge.

5

Fill out the online dispute forms on each credit bureau website to challenge the error-containing items. The FTC explains that they must try to verify each entry's accuracy with the reporting creditor. Some may not respond, which forces the bureaus to erase those entries, resulting in a higher credit score.