Credit repair is a general term often applied to the controversial practice of improving or rehabilitating one's financial reputation (creditworthiness) among creditors.

To improve a credit rating damaged by poor credit habits, in the long run only one thing will work: changing those habits.

Making arrangements with the creditors to repay them is often one of the steps in improving one's credit habits. Creditors may accept slow payment schedules, as an alternative to writing off the debt. In some cases, creditors may accept a less-than-full repayment (pennies on the dollar). The key here is contact with the creditor and taking action to retire the debt.

At the same time, reviving an old debt that is no longer collectible can actually do additional damage to one's credit reputation. It is best to be aware of the circumstances regarding the debt's collectability, statute of limitations, and legal and illegal collection practices, before contacting a creditor on a very old debt.

In rare cases, bad credit is due solely to erroneous entries being reported in one's credit history, collected and presented in a credit report, though studies have found that up to 46% of individual credit reports contain erroneous entries which may impact one's credit rating. This can readily be handled by taking advantage of the protections provided in law and regulation, primarily the dispute process.

It is possible, for example, that a bad debt of a previous tenant could be associated with a current tenant, merely because of the common address.

A credit repair campaign is most likely to show results if creditworthiness has been damaged due to incorrect or misleading information in a credit report.

In summary, such a credit repair campaign involves obtaining copies of one's credit reports and formally disputing erroneous or misleading information there found.

The process in many countries (including the United States) can be quite complex and time consuming, thus spawning the credit repair industry. Both for-profit and not-for-profit organizations have formed to assist individuals in the credit repair process, always for a fee, though governments have repeatedly increased oversight and regulation of this industry because of predatory practices.

In addition, much self-help information on credit repair has become available, providing the motivated individual the tools and knowledge to proceed with their own credit repair campaign. Just as an organization hired for this purpose, the individual would initiate the credit repair process by first obtaining copies of their credit report, reviewing the credit report for errors, omissions, and misleading information, and requesting corrections to such information by means of a formal dispute.

From the free encyclopedia Wikipedia Credit repair

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