How to Rebuild Your Credit With No Upfront Fees

Some charitable groups offer free financial advice.

Some charitable groups offer free financial advice.

Credit issues can haunt you for many years and make it difficult or impossible for you to get access to credit cards, loans and mortgages. Some for-profit companies charge fees for helping you to rebuild your credit score. While these companies offer one solution to your problems, you can get your financial house in order without involving third parties or paying any upfront fees.

Credit Report

The first step in improving your credit score involves checking your credit report. You're entitled to a free credit report every year from each of the credit bureaus. The bureaus occasionally make mistakes, so you must make sure your report actually contains accurate information. You can contest errors by writing to the credit bureaus with evidence -- such as receipts or pay off confirmations -- that you've settled debts. It might take a few months, but the credit bureaus will remove any wrongly reported late payments and charge-offs. Once these issues have been resolved you can expect to see your credit score rise.


Companies that charge upfront fees for credit repair usually offer some kind of financial counseling. Paid professionals will give you advice on managing your budget and paying your bills, and will help you to prioritize your past due debts. Many nonprofit groups provide exactly the same kind of advice and guidance, but they don't charge fees. The federal government and state governments partner with many of these groups, so you can easily distinguish the free services from the for-profit groups by finding out which organizations are government-endorsed. The more you know about budgeting, the better you can manage your debt payments and get your credit score back on track.


For-profit credit restoration companies aggressively negotiate on your behalf with your creditors. They attempt to persuade your creditors to settle your past due debts for pennies on the dollar. This sounds good at first glance, but some of your savings are passed on to the credit restoration company in the form of upfront fees. In reality, these companies are middle men or brokers and they don't have the ability to do anything that you can't do by yourself. If you cut the middle men out of the equation, you can use your savings to pay off more of your debt. When you pay off past due debts your credit score should start to rise.


Your payment history has a major impact on your credit score. If you take on new debts and make your payments on time, you should start to see your credit score rise. However, lenders aren't keen on lending cash to people who've had past credit issues. To get around this issue, you can take out cash-secured loans or credit cards. You deposit some money into a savings account and the lender issues you a loan or credit card for the same amount. The savings account is out of bounds until you repay the debt. Cash-secured loans are risk-free from a lender's perspective and you can usually get one of these loans even if you have a lousy credit score.


About the Author

Ciaran John began writing in 1994 with contributions to "The Hourly Press" and "The Sawbridgeworth Observer," and has since written for many online and print publications. He has 12 years experience working for financial services companies as a business banker, lender and investment representative and spent four years working in human resources.

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