How Credit Repair Works

If you have bad credit, it might be due to errors on your credit report. Fortunately, you can correct these mistakes and get your credit score back on track with credit repair. 

Credit repair is a process that ensures your credit report is error-free and accurately reflects your creditworthiness. At first look, it doesn’t seem too complex; you need to audit your account, look for mistakes, file a dispute, and follow up afterward. 

But like most things related to personal finance, there are a lot of moving parts. That’s why it may be in your best interest to hire a professional company to help you get these mistakes fixed. explains what you need to know about credit repair, including what it isn’t, and steps you can take to resolve it.

What Is Credit Repair?

Essentially, credit repair is a procedure you can take to fix inaccuracies and other errors on your credit report. You might think these mistakes are rare, but they aren’t — in 2013, the Federal Trade Commission discovered that 25% of consumers reported inaccuracies on their credit reports. That’s why it’s essential to check your credit report at least once a year so you can catch these mistakes before they prevent you from getting a loan or line of credit. 

These inaccuracies aren’t always easy to catch. But with a careful eye or the assistance of a credit repair service, you can find any number of mistakes, such as:


  • Accounts that are not yours
  • Duplicate accounts
  • Accounts created by an identity thief
  • Wrong inquiries or hard credit checks you didn’t verify
  • Data that should not be on your report due to the statute of limitations
  • Incorrect details and personal data, such as misspellings or previous addresses
  • Absent accounts that could benefit your credit score
  • Accounts noted as canceled or closed when they should be open, and vice versa
  • Inaccurate public information, such as a bankruptcy or foreclosure


These and other errors can wind up on your report for many reasons. Credit repair makes sure these mistakes are removed, so your account doesn’t prevent you from getting the loans you need.

What Credit Repair Is Not

While it’s true that credit repair is extremely beneficial, it’s not a one-size-fits-all fix for a bad credit score. There are two things you should know about credit repair.

First, it’s not about building your credit score. Instead, it focuses on resolving inaccuracies on your credit report. Sometimes, fixing these issues can improve your score, but not always. It’s about making sure your account is accurate, so you have fair access to financial products and services.

Secondly, credit repair does not eliminate detrimental aspects in your report. Many people think that credit repair companies can remove things like missed payments or bounced checks. But these agencies are dedicated to accuracy, so they will only remove incorrect information. 

How To Repair Your Credit

Luckily, credit repair only has three major steps, which include:


  • Checking your credit report for incorrect negative details
  • Filing a dispute with the credit bureau and initial creditor responsible for the errors
  • Arbitrating the next phases with the bureau and following up on your report


While there are just three steps, each one can take a considerable amount of time and effort. Plus, there’s always room for other errors on your part. That’s why many people hire a company to take care of the process for them. 

Whether you or a credit repair agency find a mistake on your report, the next move is filing a dispute, which has four steps:


  • Contacting the credit agency
  • Filing an official dispute notice
  • Providing the necessary paperwork and information
  • Assessing the response and performing a follow-up


It’s crucial to keep in mind that this process also requires you to contact any lender, institution, or agency that reported the mistake. If the original creditor isn’t involved, they could report the wrong information again, effectively undoing all of your hard work! Not only that, but many creditors are notoriously difficult to reach when you file a dispute. That is another reason why many experts suggest hiring a credit repair agency. 

When the credit bureau receives the dispute notice, it has between 30 and 45 days to either eliminate the error or correct it. Data from shows that the overall process takes about six months. The duration depends on your situation. Additionally, remember that even after the error is fixed, that doesn’t mean your credit score will suddenly improve. So while the credit repair company does their job, be proactive about building healthy financial habits.


  • Mahoney, Kaitlyn. “How Does Credit Repair Work.”, 27 Oct. 2020,
Ian Schindler