DIY Credit Repair 101: A Beginner's Guide to Fixing Your Credit

DIY credit repair can be a cost-effective way to fix your credit score without hiring a credit repair company. The main focus of the DIY method is fixing errors on your credit report, paying off debts, and using your credit cards responsibly. By completing the steps below, you can increase your credit score and improve your chances of qualifying for a loan or a credit card in the future.

7 tried-and-true steps to repair your credit

You can clean up your credit report for free by identifying any problems or errors and taking the right steps to address the issues dragging down your score.

When I’ve worked on my credit score in the past, I found it most helpful to also work on building a positive payment history at the same time. Doing both can further boost your score.

Keeping in mind key credit repair facts, like how to obtain your report, what issues you can fix, and how much time it takes, can help you set the right plan and expectations.

Let’s explore seven steps you can take to begin fixing your credit score on your own.

1. Get copies of your credit reports

The first step to successful credit repair is obtaining copies of your credit reports. This lets you look at the information listed and identify errors that could negatively affect your score.

Obtaining copies of your credit reports is simple and free. Visit AnnualCreditReport.com to request a report from each of the three major credit bureaus:

• Equifax
• Experian
• TransUnion

You can get one free report from each agency per week according to federal law, and requesting your credit report will not hurt your credit score.

Getting your report is as easy as providing basic identifying details, including:

• Full name
• Phone number
• Address and ZIP code
• Date of birth
• Social Security number

You may also need to answer personal questions related to previous addresses you lived at, vehicles you owned, or previous loans you had. These help ensure that it’s really you requesting the report.

2. Review each credit report

Once you have copies of your credit reports, it's time to dig into the details of each one to find negative items that may be affecting your score.

Factors that determine your credit score include:

• Payment history and on-time payments: Creditors often look at whether you paid your accounts on time or had accounts go to collection agencies.
• Average account age: Credit bureaus factor in the average age of your credit accounts when calculating your credit score. Credit bureaus may view you more positively as your average credit account age increases.
• Account types: Creditors often view having a mix of different account types, such as auto loans, credit cards, and mortgages, as a good sign that you’re a reliable borrower.
• Previous credit inquiries: Financial institutions often consider your recent credit inquiries. These are marks on your credit report that appear when you apply for housing, financial products, or other services that require a soft credit check or a hard credit pull.
• Credit utilization: Credit bureaus compare the amount of credit you use to your total available credit to calculate your credit utilization.

Reading your credit report allows you to see details of each of these important criteria that affect your score. For example, your report should include:

• A list of your accounts, current balances, and regular on-time payments
• A list of inquiries made on your account, including soft credit checks and hard credit inquiries
• Public record details, such as court filings related to bankruptcy, foreclosure, repossessions, or legal actions creditors took against you

You should review each credit report from each agency to find negative items such as missed payments. You should also search for inaccurate information, such as incorrect account statuses or accounts you do not recognize.

3. Dispute inaccuracies with the credit bureaus

Your credit reports should reflect your actual accounts, payment history, inquiries, and other details. However, they can sometimes contain inaccurate information.

This could be because creditors made mistakes in reporting your information. It could also be that someone used your identity to open accounts in your name without your permission.

Whether the inaccurate information results from a simple mistake or identity theft, you can — and should — ask for its removal, so you aren't penalized for errors.

You can dispute inaccuracies with each credit reporting agency. Here is how to file your dispute with each one:

	Equifax	Experian	TransUnion
Online	Fill out an online form	Fill out an online form	Create an account, then fill out an online form
Mail	Complete and send a dispute form to Equifax Information Services LLC P.O. Box 740256 Atlanta, GA 30348	Fill out and send a dispute form to Experian P.O. Box 4500 Allen, TX 75013	Complete and mail a dispute form to TransUnion Consumer Solutions P.O. Box 2000 Chester, PA 19016
Phone	Call 888-378-4329	Call 888-397-3742	Call 800-916-8800

Credit reporting agencies must investigate the disputed information, check with the lender or credit card issuer reporting it, and follow up with you after an investigation.

4. Make payments on late accounts

The next step is to address any late or missed payments on your credit cards, loans, or other credit accounts that show up on your credit report.

Late payments can typically lead to a low credit score. The issue can worsen the longer you wait to address it. That’s why it’s best to act quickly after missing a payment — ideally, before your account is sent to collections or the lender takes legal action against you.

If I were going this route, I’d also ask whether my financial institution would be willing to waive the late fee or forgive the missed payment. Some credit card issuers and loan providers may be willing to work with you; it doesn’t hurt to ask.

If you can’t pay off your loan or credit card balance in full, make sure to pay at least the minimum amount due. This shows creditors that you are making an effort to pay off your debt, and it also reduces the total amount of unpaid debt you owe.

Keep in mind that you may incur costly interest charges if you only make minimum payments on high-interest debt. Alternatively, you can try to transfer the balance you owe to a credit card with a low annual percentage rate (APR) or 0% intro APR or negotiate a payment plan with your creditor. Learn more in our balance transfer guide and explore our list of the best 0% APR credit cards.

5. Tackle your debt

Your credit score is greatly impacted by your credit utilization, which is the amount of credit you are using compared to the amount that is available to you. In other words, it’s how much you owe versus how much you can borrow.

For example, if you have a credit card with a limit of $1,000 and you owe $900, your credit utilization ratio on this card would be 90%. If you can pay down your credit card balance to $100, then your utilization would be 10%.

Learning how to get out of debt can help bring your credit utilization down, not to mention it will also improve your overall financial health. One way to tackle your debt is to pay off the accounts with the highest interest rates first. This is known as the debt avalanche method. Another way is to pay off accounts that have the smallest balances first. This is known as the debt snowball method. I’m motivated by a string of small wins, so I might go with the snowball method, but either way you’ll be paying down debt.

6. Open a credit repair credit card

If you have a history of missed payments or a limited credit history, opening a new credit builder card can be a useful strategy for improving your credit score. By demonstrating your ability to make timely payments, you can show lenders that you are a responsible borrower.

Of course, it can be challenging to obtain a credit card if your credit score is low, but there are credit cards designed for individuals with lower credit scores or limited credit history. I always like to remind people that’s why secured credit cards exist. The card gives you access to credit in exchange for a deposit you make that is used as collateral. This deposit is typically equal to your credit limit and is designed to protect the card issuer from any potential losses.

Check out our list of the best secured credit cards to get started.

7. Keep the progress going

Once you’ve established a solid start on your DIY credit repair, keep making healthy financial choices to maintain your momentum. This includes:

• Make a budget: Take a look at your spending habits and create a budgeting plan that allows you to make on-time payments on your debts.
• Monitor your credit reports: Keep an eye on your credit reports from all three credit reporting agencies (TransUnion, Equifax, and Experian) regularly to ensure the accuracy of the information. Begin a dispute process for any errors you find.
• Avoid applying for new credit cards you don’t need: When you apply for a credit card, it typically creates a hard inquiry on your credit report. This can negatively impact your credit score for a short time, so avoid applying for new credit cards until it’s necessary.
• Seek professional credit repair advice: If you aren’t sure how to continue your credit repair journey, you can consider using a credit repair company or speaking to a financial advisor. They can help you create a customized plan that fits your specific needs.

Important tips for successful credit repair

Improving your credit score through DIY credit repair can be time-consuming. These four tips can help speed up the process or make it more manageable.

Consolidate your debt

Consider debt consolidation to group multiple debts into one manageable payment. One method to consolidate your debt is to take out a new loan to pay off multiple high-interest debts, such as credit cards or personal loans. By consolidating your debts into one manageable loan, you reduce the number of outstanding balances, making it easier for you to stay on top of your debts and pay them off faster. If you go this route, I suggest looking for a lender with low interest rates and low or no fees to save as much money as you can; some also offer discounts or membership perks.

Additionally, you can speak to your creditors about potential debt settlement and payment plan options. Settling your debt involves negotiating with your creditors to reduce the total debt you owe. This can be a good option if you can’t make your payments due to financial hardship. You can also negotiate a payment plan that allows you to make more manageable payments over a longer period. This can help you avoid defaulting on your debts and can make it easier to stay on top of your payments.

Become an authorized user

If you have a friend or family member with a good credit score and a positive payment history on their credit card, you can ask them to add you as an authorized user on their account. Their credit card issuer would give you a card linked to their account without conducting a hard inquiry on your credit report.

As an authorized user, you are not legally responsible for paying the bills on the card, but the account can appear on your credit report. This means that the payment history, account age, and credit utilization ratio may be factored into your credit score.

Keep in mind that if you or the primary account holder makes late payments or maxes out the credit limit, it will negatively affect your credit score, not help it. Therefore, make sure you trust the primary account holder to manage the account responsibly.

Get help when needed

The DIY credit repair process may feel overwhelming. That’s why there are professionals who specialize in credit repair services. Credit repair companies can work with you to create a personalized plan that addresses the specific issues on your credit report and fits your financial situation. These companies can also work with the credit bureaus and creditors on your behalf to dispute incorrect information on your credit report and negotiate payment plans.

If you decide to go this route, it’s important to be cautious when choosing a credit repair company. Make sure to research and choose a reputable company with a good track record. You can see our list of the best credit repair companies to see which ones have good reviews.

Avoid credit repair scams

Credit repair scams are a type of fraudulent activity that targets individuals who are concerned about their credit. These scams are often carried out by dishonest companies or individuals who make false promises about improving your credit score but ultimately fail to deliver.

Keep an eye out for common red flags to avoid falling victim to credit repair scams.

• Avoid companies that require payment upfront: Legitimate credit repair companies typically provide a free consultation and only require payment after providing their services.
• Be wary of companies that promise a specific credit score: No legitimate credit repair company can guarantee a specific score increase, because credit scores are determined by multiple factors and can change over time.
• Be careful of companies that insist on secrecy: Legitimate credit repair companies will be open and transparent about their services and processes.
• Never dispute accurate information on your credit report: Disputing accurate information on your credit report isn’t only illegal, it can cause more harm than good.

FAQs

Bottom line

DIY credit repair can be an effective way to address issues on your credit report and fix your credit score.

You can start by identifying errors and inaccuracies on your credit report, disputing them with the credit bureaus, and taking steps to establish a positive credit history. Although the DIY credit repair process can be time-consuming and requires effort and knowledge, it can be a valuable way to improve your credit score.