Tips for Doing Your Own Credit Repair


Lenders rely on credit reports as part of the process to qualify you for a loan. Negative information on a credit report or a low credit score could suggest that you are less likely to pay back debt as agreed. The tips below will help you “clean up” your credit so that you can put your best foot forward when applying for a loan.

Correct Errors on Your Credit Report

Everyone is entitled to one free credit report from each of the three national credit reporting agencies every 12 months. Go to or call 877.322.8228 to request your free report. Review the report for any inaccuracies. Is all of your identifying information correct in terms of address, date of birth, employment details and social security number? Look at the list of credit accounts and make sure you recognize all of them. Check the credit inquiries for any unusual activity. The report should only show credit inquiries from the last two years. Review public record and collections information. If there is something that needs to be corrected, you can dispute the accuracy of the information with a consumer reporting agency under the guidelines of The Fair Credit Reporting Act (FCRA). Under this law, the agency must conduct an investigation at no charge and make any adjustments within 30 days. To report an error, notify the credit reporting company in writing using this sample dispute letter provided by the Federal Trade Commission (FTC). Next notify the company that provides the information to the credit reporting company using this sample dispute letter.

Manage Open Credit Accounts

If you have debt spread across various accounts, it may be beneficial to pay off what you can or consider debt consolidation to reduce the number of open accounts. But, since credit scoring models often reward individuals with longer credit histories by factoring in the age of the oldest account, it may make sense to keep some accounts open after paying them off. Having an “aged account” open and in good standing (paid in full) may help to improve your overall credit score. Consider that keeping accounts open is only a good option if the account is old enough to be worthwhile and if keeping it open won’t tempt you to continue spending on it.

Improve Your Credit History

Your payment history is an important component of your FICO score so consistently paying bills on time is critical to maintaining good credit. Late and missed payments, collections and public records such as tax liens, bankruptcies or civil judgements, can all have a negative impact on your credit score. Beware of credit repair scammers who claim they can remove accurate negative information from your credit report. Information that is negative but accurate (such as late payments and delinquencies) will remain on your credit report for 7-10 years. While paying off a debt won’t automatically remove negative information, bringing accounts current and continuing to pay on time every month will almost always have a positive impact on your credit scores over time. Creditors report to credit reporting agencies monthly so it may take up to 30 days or more for accounts to be updated after you make payments.

Keep Credit Utilization Rate Low

Your credit utilization rate compares what you owe to how much credit you have available. The rate is calculated by taking the sum of all of your debt and dividing it by the total amount of credit available to you. It is generally advisable to keep your credit utilization rate below 30%. To lower this rate you can pay off account balances to reduce the debt portion of the equation. The other, but riskier option is to increase the total amount of credit available by raising the credit limit on an existing card. But, do this with caution since increasing credit limits could trigger more spending!

While you cannot change the past, it’s never too late to establish good credit management practices. Pay attention to your credit report and commit to consistent on-time payments to start on a path to a better credit score. An experienced loan advisor can evaluate your financial situation, review any opportunities to improve your credit score, and help you achieve your goals. Complete the form below to have a loan advisor contact you.

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By Amy Malloy