Do It Yourself Credit Repair: Start by knowing your credit score.

Know your credit score. Many credit card companies provide you your up-to-date credit score right on their website account information page. If you have a low credit score your credit is costing you too much or you may not be able to get new credit. If you have a low credit score you need to understand why and try to raise it.

With a low credit score, you may simply not be able to get many credit products like credit cards. But if you have a decent income, you can often still get an auto loan or a mortgage, but there’s a catch: lenders charge a higher interest rate to homebuyers who have poor credit.

DIY Credit Repair – Where to begin.

1. Get your credit report and know where you stand.
The first thing to do when trying to improve your credit score is to understand where you are with your credit report, what’s on there, is it accurate. Request a free credit report from all three bureaus (Experian, TransUnion, and Equifax). You can get your reports truly free, once a year, at or by calling 1-877-322-8228 who is approved by the Federal Trade Commission (FTC). Other websites may offer free credit reports but you need to be careful that you aren’t signing up to a service where you will be charged a monthly fee.

2. Review your credit report and dispute any errors.
Once you have the copy of your credit report, check your identity information (Social Security number, spelling of your name and address), and credit history. Then carefully look over the credit reports to be sure there are no surprises and that you know about every entry on your report. If you see something on your credit report that you don’t recognize dispute the incorrect information on your credit report.

Review the list of credit cards, outstanding debts, and major purchases. If you see any mistakes or questionable items, make a copy of the report and highlight the error. Then, gather any information that you have to back you up, such as bank account statements, and make copies of these as well. Write a letter to the specific credit reporting agency that shows the false information, whether it is Experian, Equifax, or TransUnion. Explain the mistake and include a copy of the highlighted report along with your documentation. It’s a good idea to send this letter by certified mail, and keep a copy. The reporting agency has 30 days from the receipt of your letter to respond. The Federal Trade Commission provides advice on contacting the credit bureaus about discrepancies. Here are the contact numbers and web sites for the three credit bureaus:

• Experian: 1-888-397-3742 –
• TransUnion: 1-800-916-8800 –
• Equifax: 800-685-1111 –

3. Control your spending.

After you work on any errors on your credit report, there are three next steps to repair your credit:
4. Pay your bills on time every month.
5. Pay down your debt (especially credit card debt)
6. Avoid applying for additional credit
You need to make sure you’re not spending more than you earn. Yes, you need a budget. To start, review your tax returns for the past two years to get a sense for how much money you actually take home in a year. Subtract your regular monthly expenses (rent or mortgage, car payments, and home, car and health insurance) from your current income. Next, estimate your monthly spending habits for other expenses such as gas, groceries and entertainment. Create a limit, based on your income, of what you can spend in each of the different categories of expenses. For example, if you tend to spend $400 a month on groceries, try to stick to $300 a month on groceries by making changes like buying generic brands, using coupons and resisting impulse purchases.

If you’re behind on one or more monthly bills or you need help living within your means, you can turn to a credit counseling or debt management agency (learn more about if debt management is right for you), or you may be able to find free counseling at your local library or another non-profit organization.

Pay all bills on time going forward

Pay all of your monthly bills on time, period!

If you are behind on any, get caught up as soon as you can. On-time payments are the single most important factor to your credit score, and your credit won’t improve until you can consistently pay every bill on time.

5. Pay down credit account balances

Take charge of your credit cards. If you have any outstanding balances, make room in your budget to pay down these debts bit by bit, every month.

Know your credit limits and make every effort to stay well under the maximum when charging items. Debt is analyzed by ratios. If you charge $500 on a card which has a $1,500 limit, you’ve used 33%, which is better for your credit score than charging the same amount on a card which has a $1,000 limit (50%), both of which are better than being maxed out (100%). Pay these credit cards down, but don’t cancel them. The total amount of available credit affects your score, even if you owe nothing.

6. Don’t apply for new credit

Finally, resist the temptation to open a new credit card, even when a store offers a discount on your purchase for doing so. Each time you apply for credit is listed on your credit report as a “hard inquiry” and if you have too many within two years, your credit score will suffer.

Once you’ve fixed errors on your credit report, begun budgeting and paying off debts, be patient. It will take months or even a couple of years for your credit score to improve, but if you plan on buying a new home, it’s well worth it.


Annual Credit Report: Visit
The Federal Trade Commission and the Consumer Financial Protection Bureau sites contain extensive information about credit reports, your rights, and the laws that guarantee these rights. You can learn more about your free reports at the Federal Trade Commission’s website and the Consumer Financial Protection Bureau’s website.

Books that will put you on track:

I Will Teach You To Be Rich 1st Edition, Kindle Edition

At last, for a generation that’s materially ambitious yet financially clueless comes I Will Teach You To Be Rich, Ramit Sethi’s 6-week personal finance program for 20-to-35-year-olds. A completely practical approach delivered with a nonjudgmental style that makes readers want to do what Sethi says, it is based around the four pillars of personal finance— banking, saving, budgeting, and investing—and the wealth-building ideas of personal entrepreneurship.

Sethi covers how to save time by not wasting it managing money; the guns and cars myth of credit cards; how to negotiate like an Indian—the conversation begins with “no”; why “Budgeting Doesn’t Have to Suck!”; how to get things rolling—for real—with only $20; what most people don’t understand about taxes; how to get a CEO to take you out to lunch; how to avoid the Super Mario Brothers trap by making your savings work harder than you do; the difference between cheap and frugal; the hidden relationship between money and food. Not to mention his first key lesson: Getting started is more important than being the smartest person in the room.



credit repair guide, DIY Credit Repair, Credit Score

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