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UPDATED: August 03, 2021

Having a good credit score gives you higher chances of getting approved on a loan or credit line. It also gives you better loan terms and lower interest rates when you take out a loan. Creditors consider applicants with excellent credit reports as less risky and are given more preference and favorable terms than those with poor credit. 

Does that mean you can’t secure an approval if you have bad credit? No. You can still take out a loan, although it may be difficult and the terms may not be favorable to you. 

As such, it’s better to repair your credit first. You can do it yourself or hire credit repair services.

Credit repair is about removing negative items from your credit report to improve your credit score.
You can repair your credit score cheaply by developing healthy borrowing habits and constantly checking your credit report for errors, which won’t cost you anything. Another option is working with a credit repair company for a minimal fee. The price you have to pay varies among credit repair companies, typically from $19 to $149 a month.

Can I Repair My Credit Score Cheaply?

You can try to repair your credit on your own. It’s not a requirement to hire a credit repair professional.

DIY Credit Repair Advantages​

1. Save Money

If there’s one good thing that comes with repairing credit on your own, it’s the amount of cash you’ll get to save in the process. On the contrary, you have to pay a monthly fee when you hire the services of a credit repair company.

There’s no magic fix and if you use a credit repair service it may mean you’ll need to continue paying for their services for several months before you can see any significant improvements. The process may even take years, especially if it concerns collections and legal judgments. As such, you may want to save the money you plan to pay for credit repair services and use it to pay off your debts, instead.

2. Less Hassle

Just like any other service that you wish to get, you have to make sure that you’re dealing with a reliable, trustworthy, and experienced credit repair company. If you’re new to this, it will take you some time to do your research. This can be inconvenient, especially if you have other things to attend to.

By repairing your credit yourself, you no longer have to deal with the tedious process of finding a credible company with a proven track record. Plus, there’s really no guarantee that there’ll be improvements in your credit report after months of paying for credit repair services. Instead, you can focus your time, money, and effort on fixing your credit report and paying off your debt.

DIY Credit Repair Drawbacks

1. Long Process

By now, you already know that credit repair doesn’t happen overnight. If you wish to save money by taking on this task yourself, then you have to be willing to spend time doing what needs to be done. These include talking to different people on the phone, drafting dispute letters, and mailing them to your intended recipient.

You have to ask yourself, are you willing to do all of these things? Do you have the time and patience? If not, then DIY credit repair may not be a suitable option for you.

2. Following Incorrect Information

You’ll find countless tips online on how to fix your credit report. The enormous amount of information available can make it challenging to determine which ones work and which ones don’t. You have to do your research and you need to do it well to make sure that you follow the right advice. Otherwise, you may end up making your credit standing worse than what it is.

3. Complicated Processes

The process involved in filing a dispute for incorrect items in your credit report is straightforward. However, if the problem involves dealing with collection accounts or legal judgments, the process becomes much more complicated. Aside from that, you have to be familiarized with certain jargon and understand all the processes involved in complex cases.

How to Do a DIY Credit Repair

1. Check your credit report from all major credit bureaus. You are entitled to get one free copy of your credit report every year from Experian, TransUnion, and Equifax. Check for any inaccuracies that may impact your financial standing.

2. Dispute all inaccurate negative items on your credit report. If you notice any errors in your credit report, you have to file a dispute right away. It’s better to address the problem immediately before it negatively affects your financial life. It may take 30-60 days for any changes to reflect on the report.

3. Make timely payments. Paying bills on time is a good credit habit that you must observe. Keep in mind that 35% of your credit score comes from your credit history. So, you want your credit report to show that you’re making timely payments.

4. Pay off your credit card balances. Settle your credit card balances in full so that you can reduce your credit utilization ratio. FICO suggests having a credit utilization of 30% at most.

5. Settle past due accounts. Having multiple past due accounts in your credit report will drag down your credit score. One of your primary objectives is to pay off your past due accounts before they are charged-off or deemed uncollectible by the creditors. When that happens, your account will go to collections.

6. Apply for new credit only when necessary. You should only apply for new credit if you don’t have any other option. A new credit application triggers a hard inquiry, which will negatively affect your credit score.

What Credit Repair Companies Do

The Credit Repair Organizations Act defines credit repair companies as organizations that provide paid services to improve your credit. Aside from monitoring your credit, these companies will help you understand the credit repair process and offer recommendations and support if you need to file a dispute for errors in your credit report.

Some credit repair companies offer services on a state level while others operate on a national level. The pricing structure varies, but most of these services are paid monthly.

Keep in mind, though, that there’s no instant fix for bad credit. Some credit repair companies may claim fast credit repair. But in reality, it may take a few months to make some improvements to your credit report.

According to Investopedia, the following are the best credit repair companies in 2020:

Pros of Credit Repair Services

  • Wide Range of Services. Credit repair services claim that they take care of everything related to fixing your credit report. Their services include checking your credit report, filing disputes, getting in touch with collection agencies, and dealing with negotiations.
  • Skilled in Negotiations. Negotiating with creditors can be daunting, especially if you don’t know what you’re doing. But with credit repair companies, they already know how to talk to lending institutions, banks, collection agencies, and even credit reporting bureaus.
  • Experts in Credit Laws. If you don’t have the time to learn credit law so you can use it to your advantage when repairing, hiring a credit repair company makes sense. They’re knowledgeable about consumer protection laws and statutes, including the Fair Credit Reporting Act (FCRA), the Fair Debt Collections Practices Act (FDCPA), and the Fair Credit Billing Act (FCBA).

Cons of Credit Repair Services

  • Service Fees. Being in debt is a problem already and paying services will add up to the expenses. If you’re already short on cash, hiring a credit repair company may not be a wise financial decision.
  • Lack of Control. You’re handing off your credit report problems to a credit repair company and that means they’ll take care of everything. They’ll be in control of fixing your credit.
  • Scam Risk. Just like other services out there, some credit repair companies are scams. You may end up having more debt because of a fraud company. It’ll damage your finances and your credit standing won’t change.So only use the services of reputable companies to avoid this risk.

Are Credit Repair Services Worth It?

Deciding whether credit repair services are worth it depends on your available time, money, effort, and knowledge of credit repair. But there’s nothing a credit repair company can do that you can’t if you have the time and knowledge to do it.  With commitment, patience, diligence, and effort, you may be able to fix your credit report on your own without spending a dime.


If you’re looking for a cheap way to repair your credit, then you should consider fixing it yourself. Although you always have the option to hire a credit repair company, you can do most of the things that they offer as a service. Instead of paying a hefty amount every month, you can use the money to pay off your debts, which will help in improving your credit score.

What steps have you taken to repair your credit? We’d love to hear from you in the comments below!