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NC State Extension

Repairing Your Credit

A Practical Guide to Improving Your Credit

Credit Report

— Written by Dr. Carolyn Bird, AFC

Having a strong credit profile is of great interest to most people. And, since a credit history is built over time, sometimes mistakes or mishaps from a few years ago show up as negative factors on the credit report. Negative factors (not paying, paying late, etc.) make it difficult or very expensive to obtain credit. So, it is no wonder that there are a lot of offers to help people “repair” their credit by removing negative information. The truth about credit repair is that these companies cannot legally do anything to improve your credit score that you cannot do for yourself (for free). So, take control of your credit report, keep your money and use it for something more beneficial; like an extra payment on an account. Below are a few steps to follow to get on the path to a better credit report.

Heal Inaccurate Negative Entries

The first step is to identify and correct inaccurate entries on your credit report.

  • Request a copy of your credit report using the government authorized website at If you forget this web address, just remember to visit the Federal Trade Commission ( or the Consumer Financial Protection Bureau ( and search the site for “annual credit report.” You could, also, use the link in the sidebar of the Money Matters home page by clicking Money Matters. This is the best way to avoid landing on a commercial site. You can also call 1-877-322-8228 to request your report. You are allowed one free report every 12 months from each of the three Credit Reporting Agencies (Experian, TransUnioin, and Equifax).
  • Correct errors. If you find items you don’t recognize or believe are wrong, write a letter. The Federal Trade Commission provides a sample dispute letter. Include copies of any documents that help support your claim, if any. You can send also a copy of your credit report with the disputed items circled. The Credit Reporting Agency must investigate the dispute within 30 days and respond to you in writing with the results. If the entry is in error, the company that provided the incorrect information must notify the national Credit Reporting Agencies to correct your file. The Credit Reporting Agency must provide you a free copy of your credit report if the correction results in a change in your credit report. You can request that the Credit Reporting Agency send an updated report to anyone who received your report in the last 6 months.

Recover from Accurate Negative Entries

If the negative information in your credit report is accurate, there is no way to quickly and legally remove this information. Only time and improved credit management behavior on your part can “fix” the negative information. On the bright side, you are in control of your “credit makeover.” Here are a few important things to know.

  • Pay on time. Payment history is a major factor in your credit history. Always pay at least the minimum due by the due date. Your credit score is based on the information in your credit report and 35% of your credit score is based on whether you pay on time.
  • Keep account balances low. If you carry a balance, keep account balances low in relation to the approved credit limit. Avoid carrying large balances on multiple cards. Account balances or “credit utilization” is 30% of your credit score. Therefore, fully 65% of your credit profile and credit score is based on what you do with the credit you already have.
  • Avoid new debt. Have a plan to pay for new purchases before going online or to the store. Save enough money to pay cash or ensure that your budget will allow you to pay for the purchase over a short period of time (2 to 3 months).
  • Be patient. Over time the late pays will recede into the background as you build a strong pattern of paying on-time and avoiding excessive debt. As the negative entries become part of your distant past your credit profile will improve.

So, the next time you hear ads or see signs on the side of the road – know the truth about credit repair – you can do it yourself!