Credit Repair Information

You may see ads promising to repair your credit for a fee. Although they may sound tempting, you can repair your credit yourself rather than pay someone else. You are entitled to a free copy of your credit report annually from TransUnion, Equifax and Experian, and you can use those reports to start the repair job, which involves challenging certain information on your report and managing your credit wisely.

Incorrect Items

You can dispute any incorrect items you find on your credit reports. The credit bureaus must remove these items if the company that reported the information cannot verify them. Every negative item that is removed because it is incorrect will raise your credit score.

In fact, the law requires credit bureaus to remove negative items that cannot be verified. Some items may not be incorrect, but they may be unverifiable for various reasons. For example, a creditor may go out of business or a bank may be taken over and not be able to find the necessary paperwork for proof. If you suspect that an item cannot be verified, disputing it can help repair your credit. However, if the company comes up with proof, it will remain on your credit report.

Payment History

Rebuilding a good payment history is an important part of rebuilding your credit. Although negative items typically remain on your credit report for seven years, the newer information carries more weight than the old. The longer you maintain a consistent history of paying your bills on time, the more attractive you look to potential creditors.

New Accounts

As you repair your credit, you may be tempted to open new credit accounts. This can help repair your credit if you do it carefully and responsibly. Your credit score is helped by having a variety of accounts, such as credit cards, installment loans and store accounts. However, your credit can be harmed by applying for too many new accounts all at once. Rebuild your credit through removing negative items and maintaining a perfect payment history for six months to a year. Apply for one account, and if your application is denied, wait several months before trying again. Having too many inquiries on your credit history will undermine your repair efforts.

Refinancing Loans

If you were able to get loans while your credit was bad, you may be paying extremely high interest rates. Try to negotiate unfavorable loan terms, and refinance the loan with another lender if your current company is unwilling to budge.

Renegotiating Credit Cards

You may have credit card issuers who raised your interest rates if you missed payments. Once your credit repair efforts have gone on for six months to a year, contact your credit card companies to see if they are willing to renegotiate the rate. Let them know you are willing to transfer the balance to another card with better terms if they refuse because your newly repaired credit will give you the option of opening other accounts.