Fixing your credit: Why you need to do this job yourself

Mike Ferrara wants to buy a house and worries that mistakes on his credit report will keep him from obtaining the loan he will need.

His concern is legitimate. You'd think with a credit score of 650, he'd be fine. But not now. With banks less able to lend money than they were before the housing crash, mortgage loans are tougher to get unless people have credit scores in the mid-700s or higher on a 300-850 scale.

So Ferrara, who lives in Harwood Heights, Ill., is right to want to erase mistakes from his credit reports – the records three credit bureaus assemble to show lenders a person's history of paying bills. Fixing even one or two errors in his credit history could make the difference between receiving the loan he wants or not.

Unfortunately, there are some slimy characters out there – firms that run ads making it sound like they can make your credit messes vanish in a snap. If you have high bills and are trying to work on them, too often they collect a few hundred dollars from you and still leave you with your problems. Sometimes they make your credit score worse.

The Consumer Federation of America found in a 2003 study that many credit counseling firms charge excessive fees, promise quick fixes that are deceptive and provide improper advice. They put clients on payment plans they can't afford, and sometimes collect money from clients without paying their bills. The result for the client: a worse credit history and score.

The most reputable firms can be found through the National Foundation for Credit Counseling (800-388-2227, or, but they are not in the business of credit repair.

Too many credit-repair firms have a history of deceptive practices, and the Federal Trade Commission has charged several.

“You should be very cautious about using a ‘credit repair clinic,'” said Evan Hendricks, author of “Credit Scores & Credit Reports: How the System Really Works; What You Can Do.”

What you can do

Go to work on your credit report yourself. Only you can start the process by looking at your credit report and spotting credit card accounts you never had or late payments that weren't late.

Order a free credit report from each credit bureau through Don't respond to the ads you have seen for other sites that promise “free credit reports.” Only was set up under government rules to provide completely free reports.

You will need to look for mistakes in three credit reports, one from each credit bureau: Equifax (800-685-1111), TransUnion (800-916-8800) and Experian (888-397-3742). One bureau might be correct, while another might have errors. All three matter.

Use the official dispute form provided online by the bureaus and write a short letter that states you are “disputing the following inaccuracies.” State why, and give the account, account number, your name, address, previous address, birth date, Social Security number and supporting documentation.