How do I repair my credit?

0-9 A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Credit repair is the process of improving one’s credit record and credit scores, primarily by addressing negative entries and adding positive ones to a person’s credit history. It is usually performed by individuals whose credit histories have been damaged by negative credit entries on their credit report. The time it takes to repair a credit report will vary depending on how damaged the individual credit report is.

To repair damaged credit, consumers will normally have to take the following steps:

Step 1: identify credit problems

The first step is to identify what exactly is causing the negative reports or low scores. This entails reviewing a detailed credit report.

Fortunately, the federal government has mandated that consumers are entitled to one free copy of their credit report from each of the three major credit agencies every year. Individuals can get their free copy at,which is a service run by the three of the largest consumer credit bureaus (Equifax, Experian and TransUnion).

By retrieving and reviewing a credit report, negative credit entries can be identified. Once identified, individuals will need to determine whether the negative information is accurate or a mistake.

Note: these free credit reports do not include credit scores. Consumers who want to also receive their credit scores will usually need to pay extra for each bureau’s credit score. Additionally, each credit bureau’s report will be scored differently, because the credit reports from separate bureaus may not always have the same exact data on file.

Step 2: correct mistakes

If any of the negative entries found on the credit are erroneous, the consumer should contact the agency reporting the error and ask them to correct the erroneous entry. You should be ready to provide supporting documentation, so as to expedite the process.

The consumer should also contact the creditor directly to report the mistake and request that they remove the incorrect information.

For example, say a secured credit card account shows that a recent payment was made more than thirty days past the due date. But the consumer has documentation showing that the payment was actually made on the due date and not after.

This documentation should be sent to the credit agencies with the incorrect entry, as well as to the creditor along with a letter requesting that the incorrect information be removed. The credit agency would then have thirty days to respond. If the claim is verified, the report will be corrected.

Step 3: address negative entries

If the negative information on the report is accurate, then it must remain on the credit report. However, there are ways to mitigate the impact of those negative entries:

  • Timely payments. If the negative entry is from an active account, such as a late payment on an open credit card or personal installment loan, making all current and future payments on time will gradually lessen the impact of those previous late payments. To ensure timely payment, consumers should consider scheduling automated payments ahead of time.
  • Delinquent balances. If the negative entry is from a delinquent balance on a collection account, the consumer should consider paying it off. In the long run, paying off a collection account can help improve credit scores by removing one more negative entry.
  • Wait. With the exception of tax liens and federal loan debts, most consumer credit entries may only remain on a person’s credit report for seven years. In addition, many lenders put more weight on the borrower’s credit history for the most recent two to three years.

Step 4: rebuild credit history

Successful credit repair takes more than just removing erroneous entries and addressing negative items on the credit report. It also requires more proactive steps from the consumer:

  • Improved debt management. The primary purpose of credit reports is to provide prospective lenders with an indication of a consumer’s debt management ability. Similarly, one of the keys to improving one’s credit history is to start managing debt more successfully.
  • Addition of positive credit entries. Negative entries lower credit scores. Conversely, positive credit report entries can increase credit scores, especially when combined with proper debt management and avoiding actions that add negative entries.
  • Continuous monitoring of report. Consumers need to regularly monitor their credit reports for mistakes or factors that could affect their credit ratings.

Note that there are credit repair companies that offer to repair damaged consumer credit, but these companies can usually do nothing more than what most individuals can do on their own. It’s also important to remember that no one can legally remove accurate information from a credit report.

Consumers should also avoid companies offering to provide a new social security number. Individuals can obtain new social security numbers directly from the Social Security Administration. However, that person’s credit history will follow them to the new social security number.

Finally, repairing damaged credit will take time and effort. But with the importance of good credit, that time and energy spent repairing and rebuilding one’s credit is often worth the investment.

Disclaimer: NetCredit is a direct personal loan provider and does not provide financial advice, nor does it vouch for any vendor or service mentioned on our NetCredit personal finance blog or online consumer loan glossary. Always research and perform due diligence on any service provider or vendor before deciding to use them, and we recommend that you speak with a financial advisor regarding all decisions that will affect your finances.

back to glossary

Check Your Eligibility

This won’t affect your credit score!