How to Repair Credit Files for Free

Credit counseling and credit repair companies often promise they can restore your credit. While this may be true, it often comes at a price. Many of the practices these companies employ can be done yourself. This allows you to repair your credit files for free. By paying your bills according to payment terms and paying more than the minimum, you can improve your credit report. Inaccuracies can also be removed from your credit files.

Instructions

1

Pay your bills on time. Creditors appreciate customers who honor their payment obligations. Improving your relationship with creditors can be reflected in your credit files when they report the account as satisfactory.

2

Pay more than the monthly minimum. The monthly minimum, as the name implies, is the lowest amount acceptable for payment. You have a higher amount in finance charges, and you may also be considered a higher credit risk by a lender. Using a large amount of your available credit and paying the monthly minimum can lower your credit score or three-digit credit rating. The higher your score, the better risk you are to lenders.

3

Work out installment plans with creditors if you need assistance. This is far better than not paying your bills at all. If your account is "charged off," it will be sent to collections, and your credit files will suffer further. Do not be afraid to ask creditors for help paying your debts. Most prefer to work out a mutually agreeable payment plan instead of sending your account to collections.

4

Get a cosigner. This is an individual who agrees to hold himself financially liable in the event you can't pay your debts. Having a cosigner can open new credit accounts for you. Maintain a good relationship with new creditors by paying bills on time and not exceeding your credit limits.

5

Check your credit report. There may be inaccurate negative information that is affecting your credit score. Write the three major credit-reporting bureaus: Experian, Equifax and TransUnion (see Resources). Report any inaccurate negative information by providing your name, address and the details of any inaccuracies. Send your letters certified, return-receipt mail, so you have proof of receipt and the date the bureaus received your letters. Each credit bureau has 30 days to conduct an investigation and must furnish you with the results in writing.