DIY Credit Repair Keeps You Safe From Scam Artists
05 February 2010
Credit Loan
If your credit score isn’t where it needs to be, you might be tempted to hire a credit repair company to give it a boost. But be careful: The credit repair industry is filled with con artists, at least according to a new report from the Better Business Bureau. The Council of Better Business Bureaus recently released its list of the top-10 scams of 2009. Lurking among the work-from-home offers, herbal supplement free trials and fake job ads for positions that require upfront “application fees,” were the instant credit repair offers. Unfortunately, as consumers who willingly gave their hard-earned dollars to these credit-fixers will tell you, there is no way to “instantly” or “immediately” repair your credit. Companies offering to do so are merely trying to separate you from your dollars.
DIY Credit Repair
The truth is, the most effective way to repair your credit is to do it yourself. There is nothing a credit repair company can do to boost your credit score that you can’t do on your own, for free. To start your credit repair efforts, order free copies of the three credit reports kept on you by TransUnion, Experian and Equifax. You can order these reports, without any charge, at AnnualCreditReport.com, a Web site run by the three bureaus. Once you have your reports, look them over carefully. If you see any errors – such as a credit card account listed as open even though you canceled the card years ago or a late car payment that you know you paid on time – notify the credit bureaus in writing. Once they remove the error, your credit score will increase.
Changing Bad Habits
Once you’ve had any credit report errors eliminated, your next step in repairing your credit involves changing your spending habits. This means that you’ll have to start a new history of paying your bills on time, paying off your revolving debt and closing unused credit-card accounts. Once lenders see that you are managing your finances responsibly, they’ll slowly begin raising your credit scores.
No Overnight Successes Here
The key word here, though, is “slowly.” It takes a long time – often more than a year – to boost your credit scores enough to lift you out of the “risky borrower” category. You may have to wait a year or more before applying for that large mortgage or auto loan. If you don’t, you’ll almost certainly be saddled with high interest rates that increase your monthly loan payments. Credit repair requires patience and persistence. It doesn’t, though, require you to shell out any money to so-called “credit repair” companies.
