Free Credit Repair Advice: Do It Yourself

Here’s a bit of free credit repair advice: do it yourself.

Of course, some people say free advice is worth what you pay for it – nothing.

Before I get into your credit report and possible credit repair, I thought I might disclose why I’m writing this article. The other day I did a search for credit repair (did you know that (according to Overture) the term “credit repair” is searched more than 200,000 times each month?) and saw tons and tons of results from companies wanting to repair your credit – for a fee of course.

So I did a bit of research on credit repair and came up with some great information.

One of my intents in writing this article is to try and appear in the search results so people will become educated about credit repair before committing to some contract where their hard-earned dollars are taken away from them.

So I hope some people see this article, think about it, and decide not to participate in any type of credit repair program. Here’s why:

First off, why do you want to repair your credit? There are two possible reasons:

1. There is an error on your credit report.
2. You’ve made some fiscal mistakes and have some bad marks on your credit.

If you fall under category #1, then you have a valid reason to want to fix your credit report. There is an error, made by either the credit bureau or a creditor, and it needs to be repaired.

If you fall under category #2, then you do not have a valid reason to repair your credit. There is nothing to repair. The credit report is true and accurate. All you really can do is wait the 7 years to have the bad marks removed naturally (or 10 years if we’re talking about a bankruptcy).

So, category #1 people, here are some steps you can take towards repairing your credit. These were taken from this article at BankRate.com:

1. Order your credit reports.
2. Examine your reports carefully.
3. Double-D strategy — dispute and document.
4. Solve and dissolve debt.
5. Add stability to your credit file.

Steps 1-4 are great. Follow them as outlined in the article. As you can see, I do not agree with step five.

You need to remember that if you want a good credit score then you’re going to have to borrow money. BankRate mentions in the article to “remember [that] a bad report costs you money.” A bad report will cost you a bit more on your car insurance, and homeowner’s insurance premiums. This is a fact of life. The issuing companies use credit reports to determine your insurability. It’s all statistics.

The only other significant way it will cost you money is if you borrow again, because you’ll have to borrow at a higher rate (you’re a riskier investment for the creditor). Why don’t you just consider not borrowing money anymore? Credit repair then becomes null. That’s the free advice.

Don’t worry so much about your score. As Dave Ramsey says, “I refuse to worship at the altar of the FICO score.” This is just his way of saying, “hey, I’m not going to get hung up on my stupid credit report because I’m not going to borrow money.”

If you’re worried about applying for a mortgage, but you have really bad credit, then maybe you aren’t ready for a mortgage? Just a thought. However, if you have come around fiscally, you can always get certain mortgage lenders to do manual underwriting. This means they actually think about you and your personal situation before dropping the gavel on their decision. It’s a much more intelligent way to lend money, and it allows people who really have cleaned up their act to get a mortgage they can afford without having to wait such a long time to have the dings fall of their credit report.

To recap: if there are legitimate errors on your credit report, credit repair should be done. But take this free advice: do it yourself! The only entities that can make changes to a credit report are the credit bureau and the creditor. Consider that before you sign a check to some company promising ‘miracle removals’ from your report. It ain’t gonna happen.

If your report is legitimately tainted because you screwed up in the past, then just focus on getting your finances in order through budgeting, getting out of debt, saving an emergency fund, and mastering your money. With a mastery of money, you’ll be more concerned about where you should invest your money so it works for you. You couldn’t care less about what some company thinks about your financial situation. You’ll know the truth.

I hope this free credit repair advice was worth more than you paid for it.