How to Repair Your Own Credit

Every consumer should check their credit score regularly. It does not only define the range of accessible financial products. The indicator is used by insurance companies, landlords, and even recruiters. Sadly, reporting agencies make mistakes that drag the totals down. If your score has been reduced unfairly, you can fix it. Here is your ultimate guide to DIY repair in 2021.

Do You Have to Do It Yourself?

It is an option, not an obligation. In the United States, there are plenty of credit repair companies and services that can achieve the necessary result on your behalf. Doing everything yourself will save you money, but it may take longer due to the complexities of formal disputes. Read on to see if you are up to the task.

By law, every citizen may collect their own reports and dispute any errors. Getting the data is a piece of cake, and credit scores are easy to find through apps like Credit Karma. You can even use free dispute letter templates from the website of the Consumer Financial Protection Bureau. The tricky parts are analysis and evidence collection.

1.   Where to Start

If you want to analyze your own records, go to www.annualcreditreport.com and provide your basic details to download copies of all three reports — from TransUnion, Equifax, and Experian. Due to the pandemic, consumers may now do this every week. Previously, the service was only rendered annually. You may also call the organization or send your request by mail, but the copies will come in 15 days.

2.   Find the Culprits

Once the reports are in hand, you can start your analysis. Scrutinize every detail. Mistakes range from minor to outrageous. You may notice a misspelling of your address or an eviction or bankruptcy that never happened.

Note that different types of derogatories affect your score in different ways. The crucial element of FICO is payment history — it defines 35% of the score. The other components are the size of overall debt, the age of your records, credit mix, and new accounts. If you use professional repair, the experts will prioritize the errors for you.

3.   Gather Evidence

Now, it is time for serious investigative work. If you want to fix your own score, gather sufficient proof. Otherwise, the bureau will reject your claims. Bank statements and other official documents from your lender should support your position. Evidence collection is one of the most complicated stages. It requires precision, so be thorough.

4.   Initiate Disputes

Armed with enough evidence, you may now draft your dispute letters. You may need to contact one, two, or all three bureaus, depending on the severity of your case. Use free templates from the CFPB.

Avoid regular mail. To ensure evidence of the exchange, send the letters by certified mail with a return receipt requested. This way, you will know exactly when the agency has received the correspondence and when you should expect the result.

Every bureau will consider your claim and investigate it within 30 days. In some cases, the period is extended to 45 days. The reporting agencies will also contact your lenders in the process to establish the truth.

Afterward, one of three things may happen. The entity will accept the changes, reject them, or request more proof. If the decision is positive, you should receive a free copy of your report with all the necessary amendments. Your credit score will rise as soon as the mistakes are deleted.

Advantages of Professional Services

To communicate with bureaus and lenders efficiently, you need a certain skill set. Sloppiness will lead to redisputes, prolonging your repair. Even in the best-case scenario, it will take over a month. The quickest results are possible through delegation. Professional repair experts will not only find and dispute the errors on your behalf. They will provide a range of additional services to improve your financial well-being.

This type of repair is not free, but the costs vary. Usually, consumers may choose between three levels of services: basic, intermediate, and premium. Additional components include benefits like score monitoring, protection from identity theft, TransUnion alerts, special credit line, personal budgeting apps, etc.

Professionals will challenge a particular number of derogatories per billing cycle. The best providers have a money-back guarantee (usually, covering the first 90 days). If they fail to delete any mistakes, you get a refund. Such policies may even be unconditional, which reflects confidence in the experts’ ability to help you.

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