I see ads on tv for credit repair companies all the time. What exactly do credit repair companies do? They obtain copies of all your credit reports from the three-credit reporting bureau, Equifax, Experian and TransUnion. They look for errors on your reports and out-of-date information. Credit repair companies will scan for accounts that aren’t yours, balances that are not correct, or payments listed as late that weren’t.

They’ll send letters to the three agencies to dispute anything they determine is incorrect. The goal is to remove inaccurate information. These companies will also negotiate with your lenders and/or debt collectors for removal of negative information on your reports and verify your actual debts. Some companies will provide tools, tips, and monitoring of your credit in hopes to improve your scores. They’ll supervise your reports over time to ensure that issues they dispute are removed.

Is there a charge for these services? Absolutely and it can be a lot.  Can you do it yourself for free? Yes.

How? Go to Annual Credit Report.com (https://www.annualcreditreport.com/index.action) and request copies of your credit reports. They’re free and you’re entitled to get one from each agency per year. I recommend you get one report. Then in four months, get the second, followed by the last one four months later. You’ll be able to monitor your progress that way. Dispute your errors yourself with each of the credit bureaus.

Moral of the story:

I know there are a lot of credit repair companies out there and I really don’t recommend any of them. Instead, contact the National Foundation for Credit Counseling (https://www.nfcc.org/). This organization is nonprofit and has a network of credit-counseling agencies all over the country. Their services include helping you understand your credit reports, scores, and helping you create a budget. Finally, they will help you set up a Debt Management Plan (DMP). You’ll send a single monthly payment to them. They, in turn, will pay your lenders, frequently with lower interest rates and/or fees that have been waived. The charges for this service are usually free or low-cost.