5 easy steps to do it yourself and improve your score

Do you have bad credit? Are you tempted by TV commercials that make it easy to repair your credit and boost your score? Before you pay someone to “fix” your credit, just remember these three things:

1. According to the FTC, no one can legally remove accurate and timely negative information from a credit report.
2. Everything a credit repair company does, you can do yourself, for free. Credit repair companies are doing a service: they will save you time in exchange for money. These companies don’t have magic tricks or tools that you don’t have yourself.
3. Don’t work with a credit repair company that makes promises that are too good to be true. Ignore companies that promise “wipe your bad credit – 100% guaranteed”.

To repair your credit yourself, follow these five steps:

1. Obtain your free credit report from the 3 bureaus

You should thoroughly review your credit file with all three credit reporting agencies. You can use AnnualCreditReport.com to get your report for free. As you review the report, keep track of any information you think is incorrect. Credit scores are compiled using data from credit bureaus, so it is important to ensure that data from Experian, Equifax and TransUnion is accurate.

2. Did you find an error with an existing account?

If you recognize the account, but believe that the information reported is not correct, you should contact the financial institution that reported the information directly. For example, if you recognize the credit card, but don’t recognize the late payment, talk to the credit card company. Often the bank or credit card company can fix the problem and update the credit bureaus directly.

You might see a large balance on a credit card that you never use because someone might have stolen your credit card information. Dispute the balance directly with the credit card issuer. The credit card company would then be able to resolve the issue and update reports with the credit bureaus.

Just be sure to keep a good paper trail of your correspondence with financial services companies. If the bank or financial institution does not resolve the problem, you can take further action. But having a good paper trail makes these next steps easier.

3. Have you found accounts that are not yours?

If someone has opened accounts in your name without your knowledge, you could be a victim of identity theft. The best place to start managing identity theft is IdentityTheft.gov. This is a government website that allows you to report identity theft and get a recovery plan. Under this plan, you will be encouraged to freeze your credit and file disputes with the credit bureaus. It is essential to keep a good paper trail.

4. Use the CFPB to your advantage

If you are unable to resolve the issue with your financial institution, you have another option. You can always file a complaint with the Consumer Financial Protection Bureau. You can submit your complaint online and a dedicated worker will review your situation.

The paper trail becomes very important in this step. You should share with the CFPB as many details as possible, so they can be most helpful. Complaints to the CFPB are free.

5. Build your credit the old fashioned way

To have a good credit rating, you must have positive information reported in your credit report on a monthly basis. The easiest way to do this is to use a credit card. Just try to keep your usage low (although there is no magic number, VantageScore has published data showing that people with excellent credit scores tend to have less than 10% usage ). And make sure you pay your statement balance in full and on time each month. If you repeat this, over time your score will improve.

If you are unable to obtain a credit card, consider applying for a secured credit card instead. You must provide a deposit and you will receive a credit limit tied to the amount of your deposit. A secured credit card is reported to the credit bureau and can help build your credit score. You can buy the best secure cards from sites like MagnifyMoney and NerdWallet.

Keep monitoring your credit report and score

The sooner you discover a credit report or identity theft problem, the easier it is to fix it. To make sure you’ll be notified of problems in the future, consider signing up for a credit monitoring service. Some companies, like CreditKarma, offer free credit monitoring. Other companies provide day-to-day monitoring and resolution services through three offices. You can read more about these options here.