Random Topic: DIY Credit Repair

Hello World!

Let’s discuss one key to making your post-foreclosure world better: credit repair!

Everyone knows it’s easy to get loans with good credit and hard with bad credit. But do you know how much money bad credit costs you monthly? It’s staggering:

  • Higher Auto Insurance: Per CNBC, bad credit can raise rates up to $164/mo. (Accidents only raise rates $37/mo!)
  • Higher Monthly Rent (per Trulia and Landlordology).
  • Higher Auto Payments: a $20,000 car at 3.7% costs $366/mo, at 11.5% costs $440/mo.
  • Higher Mortgages: a $200,000 house at 4.0% costs $954/mo, at 10% costs $1,755/mo.

BREAK THE CYCLE

Do-it-yourself credit repair is relatively fast, relatively easy and costs virtually nothing. And it’s effective. Here’s what you need to know:

  • There are three main credit bureaus: Experian, Equifax and TransUnion.
  • You get negative marks from things like collections and missed payments.
  • You have a legal right to contest every negative mark in every credit bureau’s file.
  • If you contest a negative mark, it has to be deleted from your file unless the creditor validates the mark within 30 days.
  • About 60% of creditors do not validate contested negative marks.

Example: if you have ten negative marks in your files, DIY credit repair will probably remove around six of them, improving your scores.

Challenging negative marks is simple:

  1. Pull your three credit reports (link).
  2. Fill out a form letter for each credit bureau (link) saying which negative marks you’re contesting. (Pro-Tip: contest them all.)
  3. Mail each bureau their form letter and report.
  4. In about six weeks you’ll get replies identifying each bureau’s deletions.

To recap: Pull each bureau’s report, send each a letter and wait. Do this annually.

FAQ

How much does Foreclosure and Bankruptcy hurt my credit score? Up to 200 points and 250 points respectively.

Can credit repair remove bankruptcy? Yes, about 60% chance.

Can credit repair remove foreclosure? Yes, about 60% chance. (Shameless plug: Don’t sell at auction and get a 60% chance of removing foreclosure from your record. I’ll buy before the auction, giving you a 100% chance of keeping foreclosure from your record.)

LEARN MORE

Please bookmark if this was useful. Also, please comment! Have you tried DIY credit repair? What were your results? Have you tried paid credit repair services? I consider many of them borderline scams—do you agree or disagree?

David Weiss

I help people solve real estate-related problems with an emphasis on helping folks avoid foreclosure. I've been a real estate professional since 2013.

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