The Cheapest Way to Fast Credit Repair

If your credit is damaged, then repairing it can lead to a higher credit score, a number which is used by creditors to determine financial risk. With a higher score, your chances of getting approved for a loan improve, allowing you to secure a loan for a favorable interest rate.

Importantly, a strong credit score improves your chances of getting a job, as many employers will check your credit worthiness before considering you for employment. Quickly repairing your credit is in your best interest, and doing it cheaply is essential to your financial health.

Do It Yourself

There are a number of companies that can help you repair your credit quickly, but they charge fees. Certainly, you could use their services, but they are not the cheapest way to fast credit repair. Instead, if you are looking to save money, then a do-it-yourself credit repair plan is the best way to go.

Obtain Credit Reports

Three credit reporting bureaus--Equifax, Experian, and TransUnion--maintain data about American consumers, detailing important information about you. The Federal Trade Commission (FTC), which oversees consumer credit, defines a credit report: "A credit report includes information on where you live, how you pay your bills, and whether you've been sued or arrested, or have filed for bankruptcy."

According to the Fair Credit Reporting Act (FCRA), consumers may obtain one copy of their credit report annually for free from each of the three companies. Consumer advocates recommend that you get all three and compare each one to determine accuracy, notifying the credit bureaus if there is a mistake. Mistakes can lower your score. Consumer Reports says that consumers "...find some 13 million inaccuracies on their credit reports each year." Only one website allows you to get your reports for free: AnnualCreditReport.com; no other website is authorized to provide these free reports.

Obtain Credit Scores

The same site offering free credit reports also makes credit scores available, but for a fee. Pay the $8 or so for your scores which you will use as a benchmark for improving your credit.

Plan of Attack

Now that you have a good picture of exactly where you stand, then do the following to begin credit repair: pay your bills on time; reduce your outstanding credit card balances; pay off personal loans; negotiate with creditors if behind on bills; keep your current accounts open as closing them will lower your score.

Familiarize yourself with your FICO score which is used by Experian, TransUnion, and Equifax to determine credit scores. MyFICO.com outlines how five categories of credit data are given varying importance to determine your FICO score: payment history (35%), amounts owed (30%), length of credit history (15%), new credit (10%), and types of credit used (10%).

Lastly, three to six months after improving your score, pay to obtain copies of your credit reports and scores. You should see a strong improvement; a clear demonstration that fast credit repair can be done cheaply.