Credit Score Improving Your Score

Your Brain is Your Cheapest Tool for Credit Repair

Eric Rosenberg
Written by Eric Rosenberg

When you get into trouble with credit, it’s easy to throw your hands up in frustration and ignore the problem. But like most problems in life, your credit won’t improve when you ignore it. Some people choose to hire a credit repair company to fix their problems, but in many cases this ends up as a bad deal.

Rather than throwing money at a company that may not have your best interest in mind, you can take the approach of fixing your credit yourself. And, odds are, you will have a better result when you take care of it yourself compared to hiring a credit repair company. Let’s take a look at why and what steps you can take to fix your credit on your own.

Anything a “Credit Repair” Agency Can Do, So Can You

When you call up a credit repair agency for help, they have a typical set of processes and procedures designed to lower your debt and eventually improve your credit. However, many of the strategies used may take you one step forward and two steps back.

For example, one tactic used by credit repair companies is to call up lenders and ask for partial debt forgiveness. In this type of settlement, the borrower agrees to pay a portion of their outstanding debt and the remainder is discharged. The problem with this strategy is that while it lowers your debt and puts you on track for improved credit, the discharge sits as a derogatory mark on your credit for years.

While you may see your credit score improve from lowering your outstanding credit, you would also fall victim to the long-term downsides of derogatory marks on your credit. This mixed result is common in the credit repair industry, and one reason so many credit repair companies are looked at as untrustworthy. The CFPB has extensive resources on identifying scams in the credit repair industry, which is a testament to how rampant the problem is.

Get Your Income, Expenses, and Budget Under Control

Rather than paying someone else to handle your credit problems, it is best for the person who cares most and has the best knowledge on the state of your credit to handle the situation. That person is you.

Most credit problems stem from larger personal finance issues, so that is the place to start your credit repair project. Look at your income, expenses, and your budget to find the source of money stresses.

While it’s easier said than done, almost everything in personal finance comes down to one main rule: spend less than you earn. If you are living without a budget and don’t know where your money goes, step one is putting a budget in place. Once that happens, you can start working on a plan to paid off your debt.

Resolve Outstanding Issues on Your Credit Report

Now that your finances are in order, it’s time to look at your credit report. The three major credit bureaus are required to give you a copy of your credit report annually by law. The official website to get your free government mandated credit report is You can get your credit report and/or credit score for free from a handful of websites, but is the only official site to get your credit report for free directly from the credit bureaus.

About the author

Eric Rosenberg

Eric Rosenberg

Eric Rosenberg is a finance, travel, and technology writer originally from Denver, Colorado living in Ventura, California. When away from the keyboard, Eric he enjoys exploring the world, flying small airplanes, discovering new craft beers, and spending time with his wife and baby girl. You can connect with him at his own finance blog Personal Profitability.


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