If you’re faced with bad credit, you may be stumped as to how to fix it. Of course, you could hire a credit repair firm, but those cost money. Sometimes quite a bit of money. If you had extra cash to spend, you’d use it to pay down your credit card bills, right?
Fortunately, there are a number of free credit repair services available to consumers with less than perfect credit. Some are agencies that will take care of the process for you, and others are more DIY, hands-on types of services. Are you ready to start fixing your credit? Here’s how to do it for free.
Credit Repair: Knowing Your Credit
The first thing you need to do before you begin to fix your credit is to obtain a copy of your credit reports. There are three agencies you’ll need to get this report from: Equifax, TransUnion and Experian.
Each of these three reporting agencies are obligated to give you a free copy of your complete credit report if you meet one of the following two conditions:
- You have been denied credit. The denial letter from the creditor will specify which of the bureaus you should contact.
- You haven’t requested a credit report for a year. In other words, you’re entitled to one free credit report each year, regardless of whether you’ve been denied credit.
To obtain your credit report, you’ll contact each of the bureaus independently. This can be done online, via phone or through the mail.
Knowing your credit isn’t just about knowing your score. It’s also about looking over your report to find:
- Outstanding balances on auto loans, mortgages and more
- Accounts you may not recognize as your own
- Credit inquiries which have impacted your score
- Incorrect information regarding your personal details or accounts
- Public records and collections accounts
- Duplicate accounts
Knowing what’s on your credit report is the first step to take before contacting free credit repair services in your area.
Free Credit Repair Services
The average American household carries around $137,000 on debt. That debt may come from a mortgage, medical expenses, credit cards, student loans or any manner of sources. No matter where the debt is accrued, one thing is for certain: it’s hard to juggle the bills sometimes!
After you obtain your credit report, see what you can do on your own. Find discrepancies on your credit report and dispute them. It’s free to dispute inaccuracies; the most is might cost is the price of a stamp.
You’ll hear back from many of the creditors you contact. Some will graciously agree to remove incorrect items from your report. Others will ask for more information. Still others may ignore you – after all, the burden of proof” is on you to prove that you don’t owe a particular debt.
If you don’t hear back from everyone, don’t worry. You can try again, or you can start to look into free credit repair services.
There are two types of companies that can help you with your credit. These are:
- Credit counseling companies
- Credit repair companies
Credit Counseling Companies
A credit counseling company is slightly different than a free credit repair service in that you’ll have to do the legwork yourself. Credit counseling services are typically offered to people who are facing foreclosure on a home, bankruptcy or another financial event. But you can take advantage of these programs, too!
The easiest way to find a credit counseling service is through your bank or your local court system. These reputable services will do just as they say – they’ll counsel you on your debt, your income and give you guidance as to how you can better allocate your money. Then, these companies can tell you how to interpret your credit report and begin to repair your score.
Again, you’ll have to do most of the work when you go through a credit counseling company. But the service is free, and will steer you quickly in the right direction.
Credit Repair Companies
Credit repair companies differ from credit counseling services in that they do the work for you. Using your social security number and other information from you, these companies will pull your credit report and begin to identify problems.
You’ll speak with representatives at these companies and go over each account. Then, the free credit repair companies will contact creditors on your behalf. They will dispute charges and discrepancies and they’ll ask for removal of incorrect items. In some cases, these companies can improve your credit score by 100 points or more.
Of course, rebuilding your credit takes time; it won’t happen overnight. But enlisting a company to help you is a good way to begin to get back on the path to good credit.
Best Free Credit Repair Companies
The following free credit repair companies are those which have been recommended by credit attorneys and court systems across the United States. Of course, you should always do your own research to determine which free credit repair services are a good fit for your situation.
Abacus Credit Counseling
Abacus Credit Counseling is a good resource if you’re considering bankruptcy. The company will review your credit report with you and determine the next best steps. I some cases, bankruptcy may be avoidable. Abacus is a non-profit group based in California, but they serve a nationwide customer base.
Like Abacus, Consolidated Credit is a nationwide company. This company is more hands on when it comes to fixing your credit and offers free services in addition to some paid options. Consolidated Credit helps you develop a game plan for getting your credit back on track.
Housing counseling, credit card debt counseling and general debt services are just a few that Consolidated Credit offers. You can also follow the company’s step by step guide to “DIY” credit repair.
Key Credit Repair
Key Credit Repair gets great ratings from the BBB. At the time this was written, the company had a rating of A. Great customer service and results within just the first month or two are reasons frequently cited by people who have used the service.
Key Credit Repair is a national service, working with customers across the US. While no company can make claims as to how your credit score will be affected, Key Credit does usually get results more quickly than other services.