Do-It-Yourself Credit Repair

It seems like everyone is in need of credit repair these days.  But while the federal government is relying on taxpayers to help our country out of a jam, not everyone can expect a bailout.  If "fix credit" is at the top of your "to-do" list, don't wait for help from anyone else.  There are a number of steps you can take to fix credit.

Arriving with almost the same frequency as political ads these days are commercials for credit repair companies.  Promising offers such as "Fix credit" and "Improve credit instantly," many of these fly-by-night organizations are designed to gouge customers for a quick buck.

If you're in need of credit repair, avoid the temptation of a so-called "easy" fix.  Instead, use a few do-it-yourself techniques to fix your credit.

Credit repair at home

Check your credit score. Each of the three nationwide consumer reporting companies-Equifax, Experian, and TransUnion-are required to provide you with a free copy of your credit report every 12 months.  To receive one, you must request it, either on line (www.annualcreditreport.com), or by calling 1-877-322-8228.  Once you have the report, review it carefully for any mistakes.  These can negatively affect your score, and you'll need to take action immediately if you find any.

Reporting a mistake. If you disagree with something in the report, notify the consumer reporting company in writing.  Include photocopies of any documents that support your position.  State the facts and the reason for your dispute, and send the information by certified mail "return receipt requested." (This will guarantee that the consumer reporting company received it.)  

They must then investigate the item within 30 days, unless they find the request frivolous.  If they determine that a mistake has been made, they'll correct your report.  They must then send a corrected version to anyone who has requested credit information about you in the last six months.  This can be particularly helpful if you're in the process of applying for a job.

You can also dispute an item with a creditor by using the same process.  If you're correct, the credit company may not continue to report the erroneous information to the consumer reporting companies.

Organize your approach. The best way to repair your credit is to assume good credit habits.  Start by creating a budget for yourself.  List all your expenses, and compare them with your income.   This will give you a good indication of what it will take to live within your means.  Next, set up your own organized bill payment system so that you never have a late fee.  If you make late payments because you're too unorganized to write a check in a timely manner, use an automatic payment option.

Credit repair is a top priority, especially with financial markets so unsteady.  Instead of taking the bait from companies claiming to have the ability to repair your credit immediately, fix credit yourself.  You'll pay nothing, and you'll likely get superior results.