Can You Repair Bad Credit for Free? Yes and No.

If you are considering hiring a credit repair company to improve your score, you need to have all the facts before you make your decision.

If you have a bad credit score, you know that your financial options are pretty limited. Traditional lenders like banks and credit card companies won’t lend to you, which means that you’re stuck with bad credit loans and no credit check loans when you need some extra cash.

And while some of these loans—like certain bad credit installment loans—can be a safe, affordable option, there are also tons of payday loans, cash advances, and title loans out there that could all-too-easily trap you in an expensive cycle of debt!

The only way to get out from under that bad credit score is to improve it. And if you’ve looked into it, you’ve probably seen lots of ads for credit repair companies that will help you improve your credit for a fee. So is this something worth spending money on, or can you repair your credit yourself for free?

The answer is … a little complicated. You aren’t going to be able to repair your credit without spending money, but you don’t need to pay a credit repair in order to do it. In fact, there are many credit repair companies out there wherein paying them would basically mean throwing your money away.

How bad credit works. 

There are several different credit scores out there, but when we talk about “credit scores,” we’re almost always referring to your “FICO” score, which is by far the most widely used. Your FICO score is based on information in your credit reports, which are compiled by the three main credit bureaus: Experian, TransUnion, and Equifax.

Your credit reports contain a whole bunch of information regarding your trustworthiness as a borrower and a credit user over the past seven to 10 years. But for the purpose of creating your FICO score, there are five categories of information that factor in—and the two most important factors by far are your payment history and your amounts owed which together comprise 65 percent of your total score.

If you have bad credit, it is almost certainly because you have made mistakes in some combination of these two areas. To put it simply, you either have a history of paying your bills late (or not at all), you’ve taken out too much high-interest consumer debt (likely on credit cards), or you’ve done both!

How to repair your credit.

If your payment history and your amounts owed are the two factors dragging down your credit score, then they are also the two areas that you’ll need to focus on in order to repair it. Start paying your bills on time and pay down your outstanding debt and you will see your score start to recover!

When it comes to paying down debt—whether that debt is from personal loans, credit cards, student loans, online loans, or whatever—it helps to have a strategy. Try looking into the Debt Snowball and Debt Avalanche methods, both of which focus on putting all your extra debt repayment funds towards one debt at a time while making only your minimum payments on all your other debts. With the Snowball method, you pay off your debts from smallest to largest, while the Debt Avalanche has you pay off your highest interest rates first.

When it comes to paying your bills on time, there are a couple of things you can do. If your due dates are too clumped together, causing cash flow issues, talk to your creditors about having your due dates changed. You should also set up alerts and auto-payments to help prevent late payments. Most importantly, you need to build a budget so that you can make sure you always have the necessary funds to cover your bills.

You should also check your credit reports to make sure there aren’t any errors dragging down your score. According to a study by the Federal Trade Commission, approximately one in five consumers have errors on at least one of their credit reports. Here’s the good news: You’re entitled by law to one free copy of your credit report from each bureau annually! That means three free credit reports every year. To order a free copy of your report, visit

For more information on how to have errors removed from your report, check out our blog post on how to fix credit report errors.

If you have any debts that have been sent to collection agencies, make sure that you pay those off. Otherwise, you could end up getting sent to court and having your wages garnished. Once a collection account is paid off, you can also request that the account be removed entirely from your report. The odds aren’t great that your request will be granted, but it never hurts to ask!

Paying your bills on time and paying down your debt are both going to cost you money, that’s just unavoidable. So repairing your credit isn’t something you can actually do for free. But that doesn’t mean you have to fork over even more money to a credit repair company.

The pros and cons of credit repair companies.

Credit repair companies are for-profit businesses that help clients improve their credit and get out of debt. They look at your credit report for errors and take steps to fix them, contact debt collection agencies to have accounts removed (and/or to get less reputable debt collectors off your back), and they can even contact creditors about negotiating down your open balances.

Here’s the thing about credit repair companies: Pretty much everything they do, you can do yourself. You can contest credit report errors, you can work with debt collectors, and you can contact your creditors to try and negotiate a lower balance.

Now, sometimes it helps to have a professional working on your behalf instead of trying to DIY the situation, but these aren’t services that you have to pay someone else to do on your behalf. Beyond the added benefit of having a professional working on your behalf, what credit repair companies do save is time. Because trying to do all of these things yourself will require a fair amount of time and energy.

But one big danger with credit repair companies is that many of them are less than reputable. And the last thing you want to do is hire a company that just take your money and runs. To learn more about the warning signs you’ll encounter when shopping for a credit repair company, check out this blog post: Looking for a Credit Repair Company? Here are 4 Red Flags to Avoid Getting Scammed.

This last part bears some repeating: Even if you do hire a credit repair company, you’ll still have to pay down all your open balances and start paying your bills on time. So a lot of the cost and work involved in repairing your credit is still going to fall on your shoulders. You’re probably better off handling those finances on your own or working with a reputable non-profit credit counselor in your area.

Getting out of bad credit is tough. And you’ll need all the help you can. But when it comes to credit repair companies, you might not actually be getting a lot of help from them. Instead, that company could simply be yet another obligation that’s draining your bank account dry.

To learn more about improving your credit, check out these other posts and articles from OppLoans:

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The information contained herein is provided for free and is to be used for educational and informational purposes only. We are not a credit repair organization as defined under federal or state law and we do not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit. Articles provided in connection with this blog are general in nature, provided for informational purposes only and are not a substitute for individualized professional advice. We make no representation that we will improve or attempt to improve your credit record, history, or rating through the use of the resources provided through the OppLoans blog.