What You Need To Know About Credit Repair

Know These 9 Critical Facts About Mending Your Credit

Concerned woman reviewing her credit report

Georgijevic / Creative RF / Getty

It can be difficult to navigate society if you have a poor credit history. A number of companies use your credit to decide whether to do business with you, and to set pricing for the products and services you use. Consumers with troubled credit histories often seek credit repair to improve their financial situations. These are the most critical things you should keep in mind as you evaluate your options.

1. You Can Do It Yourself

A reputable credit repair company might be an option, but there's really nothing it can do for you that you can't do for yourself. Plenty of information is available in books and on the internet that you can use to educate yourself on how credit works and what you can do to repair your own.

Removing negative information can be accomplished with techniques like disputing false reports, debt validation, pay-for-delete services, and goodwill letters. Credit repair companies use all of these strategies to get negative information removed from your credit report.

Doing it yourself can save you money. It also gives you power and control over your credit history.

2. You're Entitled to Free Credit Reports

Your credit score is influenced by the information contained on your credit report, so checking your report is the first step toward increasing your credit score. You can get a free copy of your credit report once per year from each of the major credit bureaus: Equifax, Experian, and TransUnion. Just visit AnnualCreditReport.com.


Free credit reports are available every week from AnnualCreditReport.com through April 20, 2022. This offer has been made in response to the COVID-19 pandemic.

3. Your Credit Score Tells You Where You Stand

Pay attention to your credit score. This magic number tells you whether your credit is good, bad, or improving. A low credit score indicates a poor credit history that needs work. It's an indication that your history is improving if your score goes up. But purchasing your credit score every time you want to see where you stand can get expensive.

Using a free credit score service such as Credit Karma or Credit Sesame will allow you to monitor your credit progress at no cost, but be careful. Look for a credit monitoring service that doesn't ask for a credit card. Otherwise, there's a chance you might actually be signing up for a free trial subscription that will begin charging you each month if you don't cancel the service.


Your credit score is based on five categories of information: your payment history, the total amount of your debt, the length of time you've been borrowing, the types of credit accounts you have, and recent applications for credit that you've made. Improving your credit in each of these areas will boost your score.

4. Removing Accurate Negative Info Is Tough

The emphasis here is on the word "accurate." Credit bureaus are only legally obligated to remove inaccurate or unverifiable information from your credit report. It's tougher to remove accurately reported negative information, because the credit bureaus are within their rights to report it. In fact, the integrity of the credit system depends on credit bureaus reporting all accurate information.

Some strategies can help you remove accurate negative information, however, such as a collection account for a debt that you legitimately owe. These strategies might take more time and effort than a simple credit report dispute, but they're worth a try. Debt validation (for collection agencies), paying for deletion, and goodwill deletion requests are the best options for these types of accounts.

5. Consider Doing Nothing

Negative information won't stay on your credit report forever. Most reports only remain there for seven years, although there are a few exceptions. For example, Chapter 7 bankruptcy can stay on your credit report for up to 10 years.

Waiting for the account to simply fall off might be less stressful and time-consuming than trying to remove it, particularly if you're closing in on the credit-reporting time limit. Contrary to popular belief, taking action on a negative account does not extend the credit-reporting time limit. It will still drop off your report after the seventh year if you pay off a six-year-old debt collection.


Some versions of the FICO and VantageScore do not include paid collections in your credit score.

6. Closing Your Accounts Won't Help

There's a widespread belief that only open accounts are included in a person's credit report and that closing an account will remove it. Unfortunately, closing an account can actually hurt your credit score in some cases. It won't remove the account from your credit report. All of the details about the closed account will continue to be listed there as reported by your creditors for seven years. Moreover, closing a credit card account can reduce your credit utilization in some cases, which can negatively impact your credit score.

"Before [closing accounts], consumers should take into consideration other factors that comprise credit scores, such as the length of time the account has been opened," says Nancy Bistritz-Balkan, former Director Public Relations and Communications of Global Consumer Solutions at Equifax, one of the three major credit bureaus.

"If you've exhibited the right kinds of behavior for an established period of time with an account (i.e., paying on time, every time), then closing that account may not make sense," according to Bistritz-Balkan.

Leaving the account open can actually help repair your credit if the account is in good standing or can be brought back into good standing by catching up on the past-due balance. You need open, active accounts with a positive payment history to improve your credit score. Opening new accounts with a bad credit score can be difficult. Rehabilitating the accounts you already have can be much easier.

7. Be Wary of Credit Repair Companies

Many credit repair companies make lofty promises they can't fulfill. They charge upfront fees, and they fail to deliver on their services. That is prohibited by federal law, but consumers who aren't familiar with the law might not realize that they're being taken advantage of until it's too late.


The Federal Trade Commission (FTC) has pursued dozens of credit repair companies that have broken the law. These companies are often required to pay hefty fines, and some have even been banned from doing business in the credit repair industry.

A few warning signs that you're dealing with a shady credit repair company might include:

  • It asks you to pay upfront before providing any services.
  • It cites an affiliation with the government or a special relationship with the credit bureaus.
  • It promises that you'll achieve a specific credit score.
  • It promises to delete accurate information from your credit report.
  • It fails to inform you of your right to dispute information yourself, directly with the credit bureaus.
  • It asks you to waive your rights under the Credit Repair Organizations Act.

8. Don't Expect Overnight Results

It takes time to rebuild a bad credit history. Your credit score considers your most recent credit history more significantly than older items. A good credit history typically has a minimal number of negative entries and a lot of recent positive information.

Having a few months of on-time payments is a step in the right direction, but it won't give you excellent credit right away. You'll see your credit improve gradually as time passes, as the negative information falls off or gets older, and you replace it with positive information.


Your credit score might fluctuate during the credit repair process as the information in your credit report changes. Focus on the general trend of your score over a period of time rather than on daily fluctuations.

9. Change Your Habits

Many people go through credit repair—either by doing it themselves or by hiring a company—so they can borrow money for a mortgage, a car, or another significant purchase. That's OK, but you have to adopt habits that will maintain good credit if you want your healthy score to last. That means borrowing only what you can realistically afford to pay back, and maybe even a little less. Paying your bills on time is perhaps one of the best things you can do for your credit.

Bistritz-Balkan says, "When it comes to creditworthiness, a great rule of thumb is to pay your bills on time, every time. Lenders and creditors want to know that you've been able to satisfy your financial commitments. Therefore, paying bills on time is an important, fundamental behavior to establish early on."

Key Takeaways

  • Repairing bad credit takes time, so it's important to be patient with the process.
  • The amount of time it takes can vary from person to person, depending on the information that's included on your credit report and how you're going about improving it.
  • Repairing your credit isn't a one-time thing. You'll want to maintain it in good standing going forward.
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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Federal Trade Commission. "Free Weekly Credit Reports During COVID Extended Until April 2022." Accessed Sept. 9, 2021.

  2. myFICO. "What's in My FICO Scores?" Accessed Sept. 9, 2021.

  3. Consumer Financial Protection Bureau. "Is It Possible To Remove Accurate, Negative Information From My Credit Report?" Accessed Sept. 9, 2021.

  4. Federal Trade Commission. "Fair Credit Reporting Act § 605. Requirements Relating to Information Contained in Consumer Reports." Page 22. Accessed Sept. 9, 2021.

  5. TransUnion. "How Long Do Closed Accounts Stay on My Credit Report?" Accessed Sept. 9, 2021.

  6. Consumer Financial Protection Bureau. "How Can I Tell a Credit Repair Scam From a Reputable Credit Counselor?" Accessed Sept. 9, 2021.

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