Credit Repair – Should You Do it Yourself?

Written by on October 19, 2012 in Money - 1 Comment | Print this page


Earlier this year, I bought a classic BMW.  I’d always wanted to buy an older car and fix it up, but with limited mechanical abilities and skills, I soon found myself wondering if I’d gotten in over my head. Given that the car was more than 25 years old, I expected it to have its share of mechanical problems, but the reality was far worse than I imagined: bad ball-joints, blown shocks, bent control arms, faulty brake-lights, and a surging idle – and that was just the start. To say the work required was daunting would be understatement.

Of course, I could have just taken the car to a repair shop, but at $50-$90 per hour for labor, I would have doubled my investment in the first couple of days at the shop, and I would not have learned a thing. So I set to work fixing these issues myself. Many people face a similar decision when it comes to repairing their credit. They’re overwhelmed by the seemingly daunting task of fixing a poor credit report, just as they would by fixing their own car.

So they “take their credit into the shop”: they go out and hire a credit repair agency. Many companies charge $800 for their “basic” credit repair service. However, much like repairing your own car, you can fix your credit yourself, as long as you have the time and patience to do so. The internet is such a big advantage when it comes to DIY-ing your credit, as you have nearly instant access to forums, FTC recommendations, and blogs like this one that teach you what to do and how to do it. Here’s how to repair your own credit using the same methods that the professionals use.

The 4 Primary Steps of DIY Credit Repair

Start by grabbing your credit reports. A credit repair agency will tell you that you have to pay for a credit report. In reality, once a year, you can get a free one from each of the major credit reporting agencies at Be sure to print or save each report because you can only view them on this site once a year.

The next step is to check for inaccuracies. Things like your name, present and past addresses, credit inquiries, Social Security number, and account information including balance, payment dates, and status, should all be correct. If not, dispute them. You would be surprised by how common mistakes are. Items can be disputed online, or by sending the reporting agency a letter. Online is convenient, but limited since you can only make a brief statement. A written dispute allows you to add copies of any evidence that you may have. The Federal Trade Commission (FTC) advises that you ”send your letter by certified mail, ‘return receipt requested,’ so you can document what the credit reporting company received” and that you ”keep copies of your dispute letter and enclosures.” The FTC offers a sample dispute letter that you can use.

In the event that your first letter does not get results or a response, push on. After 30 days send a second letter (by certified mail and keep a copy). Use the sample letter again, but add this paragraph:

“According to my records, it has been 30 days and you still have not responded to my previous inquiry.  This is illegal, as evidenced by this excerpt from the Fair Credit Reporting Act (15 U.S.C. § 1681i):

If the completeness or accuracy of any item of information contained in a consumer’s file at a consumer reporting agency is disputed by the consumer and the consumer notifies the agency directly of such dispute, the agency shall re-investigate free of charge and record the current status of the disputed information, or delete the item from the file before the end of the 30-day period beginning on the date on which the agency receives the notice of the dispute from the consumer.

The FCRA clearly states that you must reply within 30 days, and my first letter was sent on (date).  Please confirm in writing that you have removed the inaccuracies detailed in my initial dispute from my credit report.”

If the disputed item has been properly investigated, you will be notified of the results either way. In the event that an error has been made the agency is required to fix it and automatically report it to the other two. Additionally, they are required to notify anyone who has requested your report in the past six months of the error.

Your last step to a better credit report is to face the negative items on your report. You have three options: let them roll off, dispute them if you think the creditor has no proof, or convince the creditor to remove them. The first option is the easiest, but often takes seven years from the original delinquency date. Disputing a debt that you know you owe is a bit risky and is usually a waste of time. Lastly, getting a creditor to remove a negative report is a long shot. Your best option is to negotiate for a lower balance and repayment terms. Be sure to get any agreement in writing before you make a single payment.

Repairing Your Own Credit: Worth The Trouble?

Many personal finance bloggers just recommend that you handle the entire process yourself. After all, it will save you money – there’s no doubt about that. But you have to ask yourself: how much is your time worth? This is something I learned while restoring my 1986 BMW 325e. With minimal prior experience, even the simplest projects took me exponentially longer than they would have taken a professional, and I made mistake after mistake. It was painstaking process full of busted knuckles, caustic chemicals, and curse words. More than once I questioned whether it was all worth it. In the end, it was. I really wanted to learn about cars, and I did.

But when it comes to repairing my own credit, I’d happily hire a professional to manage the dispute process. Why? For one, I think my credit is a little too important to entrust to a beginner (me). But more importantly, my time is valuable to me, and credit repair just isn’t as cool, edifying, or intangibly satisfying as fixing my own car. Sure, I’d be paying someone to do something that I could do on my own, but that’s just it: I wouldn’t have to do it myself. Of course, not everyone feels similarly, which is why I’ve included the DIY tips above.

This is a guest post.  T. Brown is a personal finance blogger who has contributed articles to many authority sites across the web.  His company,, helps people get approved for new and used car loans.  He is persevering with the restoration of his 1986 BMW 325e.


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