You can repair your credit on your own, according to the Federal Trade Commission (FTC). The main technique is to get credit report copies and find negative items to challenge. They will be taken off your reports if the lenders do not verify them within 30 days, as required under the Fair Credit Reporting Act (FCRA). It is free to file disputes, and the FCRA entitles you to free credit report copies every year. However, you may choose to pay a credit report company to handle the process for you. The FTC advises being very careful when dealing with these repair firms.
Step 1
Contact the Better Business Bureau (BBB) and your local attorney general's office to check on the credit repair companies you are considering. Eliminate any that have a bad BBB rating or that have complaints against them with the attorney general.
Step 2
Ask each company what it will do for you if you hire it and how much the credit repair process will cost. The FTC advises against using companies that make unrealistic promises or use illegal tactics like helping you get an Employer Identification Number to use instead of a Social Security Number for establishing a new credit identity. It also warns not to do business with a firm that won't give you a price or provide specific information in writing.
Step 3
Ask each company how long it has been in the credit repair business. Lexington Law, a law firm that handles credit repair, explains that some firms will combine the number of years worked by all their employees rather than telling you how long the company has been in existence unless you specify what you want to know.
Step 4
Select a company and read its contract thoroughly before signing. Make sure it includes all of the promises it has made to you. It does not have to fulfill them unless they are noted in the paperwork. The FTC states that you should never be required to pay upfront for services. The Credit Repair Organizations Act forbids credit repair firms from making you pay in advance.
Step 5
Monitor the company's progress and make sure it is sticking to the written agreement and fulfilling its promises. Withhold payment until it has completed the credit repair process.
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