Credit Repair “Do it yourself” Don’t get Scammed!

Woman with laptop.Credit Repair is one of those services that is very shady…. Being a mortgage lender, we have credit repair companies knocking at our door all the time. I am amazed that credit repair companies will walk in our door and actually state they can remove bankruptcies, judgments, collections and slow pays from a credit report. They also claim they can increase your credit score. I will be the first to tell you that these credit repair companies are not telling the truth. Here is the only and quickest way to repair your credit report. I guarantee that if you follow my instructions your credit will get better.

-Pull your credit report

You can go to to get a free credit report at no cost to you once a year. If you want to know your credit scores you can pull your credit report with scores through our You need to know what is on your credit report before you can do anything to help your credit situation.

-You must have money saved

This is a very interesting topic, because I get people wanting credit repair help all the time, but they have no money saved. Your credit does not get better by waiving a magical wand and poof your bad credit is gone. You need money in order to get matters resolved. If you don’t have any money saved, STOP reading this article, bookmark it and come back once you have money saved. Most credit repair candidates need $2500 to $4000 in the bank to repair their credit report. Credit Repair companies will typically take around $1000 to $2000 dollars, and get absolutely nothing done for you. So save your money to pay off collections and don’t give it to a credit repair company.

-Study your credit report and make notes

If you have money saved to get started, then print out your credit report and get ready to make notes, highlight and write down collection company numbers. Look over your credit report and find the most recent collections that are small collections. I find that medical collections and utility collections are typically a good starting point. Once you have determined what is on your credit report, write down the numbers to at least 10 collection companies along with the collection amount owed. Also make note of any discrepancies on your report, if they are indeed discrepancies, you can get inaccuracies removed from your credit report.

-Negotiate Collections

This is where I lose most people, because this requires effort and some money. “Most credit repair company’s dispute collections that you actually owe and you will find this is a waste of your time and money.” By now you should have a list of collection company numbers. Determine the total amount owed to all 10 collections. If you only have 4 collections, then calculate the totals of those 4 companies. All collection companies will allow you to pay pennies on the dollar. So if you have a medical collection for $350 dollars, offer them $150 bucks to settle. You will find that these companies typically will settle for 30 to 40% of the balanced owed. This process is the quickest way to repair your credit report I promise. I have helped tons of people with this method, and those whom listened are happy home owners now. If you have collections that are 3 years old, I recommend paying them off. Collections stay on your credit report for 7 years, so you would need to wait another 4 years before your credit rebounded. Plain and simple, negotiate the collections you owe and your credit score will recover. I read article after article stating not to pay off collections, which is completely wrong.

-Collect Letters from Collection agencies

Once you have paid off your collections, the creditor will send a letter stating the nature of your collection account to the credit bureaus. The letter will either say “paid in full” or “settled for less than balance owed.” That collection company will report the change to the credit bureaus which will result in a $0 owed being reported. This is what increases your score, the balanced owed changing to a zero balance. I personally know people that at one time worked for the bureaus tell me this is not true. I know for a FACT it does work, because in the mortgage business we use a trick of the trade called rapid rescore that updates the bureaus once a collection status changes. In some rare cases the score did not change, but 99% of the time the credit score went up. Make sure you collect all the letters the collection companies sends in the mail, just in case a collection does not get updated properly with the bureaus.

Dispute information that is incorrect

There is always information on a credit report that is wrong. Find that information and if you find that its reporting to all 3 credit bureaus, dispute it with Equifax, Experian, and TransUnion. You can use our online disputing process. Online Credit Dispute. You may also write letters to the credit bureaus if you want to dispute that way. Example Dispute Letter. Here are the addresses below to each credit bureau. Once you dispute, depending on which method you use, the credit bureau has 30 days to respond. Don’t dispute something you actually owe, unless that collection has expired. Go here for credit collection expiration examples.

Credit Bureau Addresses:

P.O. Box 9556
Allen, TX 75013

Equifax Information Services
P.O. BOX 740256
Atlanta, GA 30374

Customer Disclosure Center
Trans Union Consumer Relations
P.O. Box 2000
Chester, PA 19022-2000

Re-establish credit

Once you have negotiated your collections you need good credit reporting to the credit bureaus. The Fair Isaac scoring model has different determining factors that make up your score. Here is how they are broking down…

- Payment History 35% of score

- Amounts Owed 30% of score

- Length of Credit History 15% of score

- New Credit 10% of score

- Types of Credit Used 10% of score

If you have nothing reporting on your credit report, go immediately and get 2 secured credit cards. Secured credit cards are the best way to re-establish your credit. After about 6 months you should see improvement to your overall credit rating. Be patient, this process could take up to 12 months of hard work. I promise it’s a lot better than paying some credit repair company just to take your money.

- Recap

Hopefully after 2 – 3 months you have paid off as many or all the collections you can afford. If you found you had no good credit revolving on your credit report, you also established new credit. Maybe you found some inaccuracies on your credit report that you disputed either online or through the mail. What ever your situation was, your credit report and credit scores will be improving with the method discussed. If you find you have questions feel free to e-mail me.

Author: Mike Clover

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Disclaimer: This information has been compiled and provided by as an informational service to the public. While our goal is to provide information that will help consumers to manage their credit and debt, this information should not be considered legal advice. Such advice must be specific to the various circumstances of each person's situation, and the general information provided on these pages should not be used as a substitute for the advice of competent legal counsel.