Fix your credit yourself (free)

You don’t have to pay anyone to fix mistakes on your credit report. You have a legal right to dispute errors for free. Here’s how to get your reports, fix what’s wrong, rebuild over time, and avoid companies that charge for things you can do yourself.

Step 1: Get your free credit reports

• You can get free credit reports every week from all three nationwide credit bureaus (Equifax, Experian, and TransUnion). The FTC says this is permanent.
• The only official site is AnnualCreditReport.com. You can also call 1-877-322-8228. The FTC warns about look-alike sites. Type the address yourself.
• Read each report. Look for accounts you don’t recognize, wrong balances, payments marked late that weren’t, old addresses you never lived at, and the same debt listed twice.
• Accounts you never opened can mean identity theft. Use our identity theft guide and IdentityTheft.gov.

The FTC says you may also get extra free reports in some situations, like after being turned down for credit (ask within 60 days), if you’re unemployed and plan to look for work, if you get public assistance, or if you think your file has errors because of fraud.

Step 2: Dispute mistakes, for free

The FTC says that under the Fair Credit Reporting Act, both the credit bureau and the business that gave it the information must correct wrong or incomplete information, at no cost to you. Dispute with both:

1. Dispute with each credit bureau that shows the mistake. You can do it online, by phone, or by mail. Explain what’s wrong and why, and include copies (not originals) of anything that backs you up. Use our dispute letter if you write.
2. Dispute with the business that reported it (the bank, card company, or lender). Write to the address it gives for disputes, explain what’s wrong, and include copies of your proof.
3. Keep records. The FTC suggests sending letters by certified mail with a return receipt, and keeping copies of everything you send.

What happens next (FTC):

• The credit bureau generally has 30 days to investigate. It must pass your information to the business that reported the item. It can skip a dispute it decides is frivolous, but it has to tell you.
• You’ll get the results in writing, plus a free copy of your report if anything changed.
• If something was corrected, you can ask the bureau to send the correction to anyone who got your report in the past six months (two years for a job).
• If the dispute doesn’t go your way, you can ask the bureau to add a short statement about the dispute to your file.
• If you dispute with the business directly, it can’t keep reporting the item to the bureaus without noting that you dispute it.

Still stuck? You can file a complaint with the CFPB.

How long bad marks stay

• Most negative information, like late payments and collections, can stay on your report for seven years (FTC).
• Bankruptcy can stay for 10 years (FTC).
• Correct, current information can’t be removed just because it hurts. The FTC and CFPB say no one can legally remove accurate, up-to-date negative information. It fades with time and new on-time payments.

Step 3: Rebuild your credit

There are no shortcuts, but these steps from the CFPB help over time:

• Pay every bill on time, every time. The CFPB says paying on time can help you build a strong credit history. Automatic payments or reminders can help.
• Keep your card balances low (“credit utilization”). This is how much of your credit limits you’re using. Example: a $300 balance on a $1,000 limit is 30%. The CFPB says experts advise using no more than 30% of your total limit, and paying the full balance each month is best. You don’t need to carry a balance to build credit.
• Think twice before closing old cards. The CFPB says closing accounts can raise the share of credit you’re using, which could lower your score.
• A secured credit card can help you start over. You put down a cash deposit, for example $500, and can spend up to that amount. Ask the bank or credit union if it reports to the three credit bureaus. The CFPB says most prepaid cards don’t.
• Other options the CFPB mentions are credit-builder loans and store cards with low limits. Ask your bank, credit union, or a nonprofit credit counseling agency.

usaBob doesn’t recommend any card, loan, or company, and we don’t get paid by any of them.

Watch out for credit repair scams

Credit repair companies charge for things you can do yourself for free. Under the federal Credit Repair Organizations Act, the FTC and CFPB say a credit repair company:

• can’t charge you before it does the work it promised. The CFPB says all forms of upfront payment are illegal, including monthly plans set up to get around the rule.
• must give you a written contract that explains your rights, the services, how long it will take, the total cost, and any guarantees, before it does any work.
• must let you cancel within three business days without any charge.
• can’t lie about what it can do, or tell you to lie on a credit application.

The FTC says if a credit repair company breaks the law, you may be able to sue it. Report credit repair scams to the FTC at ReportFraud.ftc.gov and to your state attorney general.

Dispute letter template

Send one letter to each credit bureau that shows the mistake. You can adapt it to send to the business that reported the item, too.

[Your full name]
[Your mailing address]
[Date]

[Credit bureau name: Equifax, Experian, or TransUnion]
[The bureau's dispute mailing address]

Re: Dispute of information in my credit report

I am writing to dispute the following information in my credit report. I have circled or highlighted the items I dispute on the attached copy of my report.

Item 1:
Company name: [name of the business that reported it]
Account number: [last 4 digits only, if possible]
What is wrong: [for example: "This is not my account." / "I paid this in full on [date]." / "This was never late." / "The balance is wrong."]
What I am asking: [for example: "Please remove this account." / "Please correct the balance to $___." / "Please show this account as paid."]

[Repeat for each item you dispute.]

I am enclosing copies (not originals) of documents that support my position: [list them, for example: a payment receipt, a bank statement, a letter from the creditor].

Please investigate this information and correct or delete anything that is inaccurate or cannot be verified. Please send me the results in writing.

Sincerely,
[Your name]

Enclosures: [copy of credit report with items marked; copies of supporting documents]