There are lots of places out there that promise, for a “small fee”, to repair your credit. There are also lots of places out there that promise I can make $4,000 per week from home. I do not necessarily believe either of them.

I think the real issue is the terminology. I think a better way to word it would be “correct your credit”  I have heard many people tell me that they heard you could “clean” your credit report of negatives such as lawsuits and bankruptcies. But nothing could be further from the truth.

To better explain, I think it’s necessary to know just what a credit report is and what it does. Okay, we all know that our debts are on the reports, and if those debts are bad then our credit score will go down. But what many may not know, is that “actions” also are reported. Actions on your credit report can include, repossession, foreclosures, lawsuits, bankruptcies and bounced checks. If you are sued by a creditor then, in effect, that creditor is listed twice on your credit report. Once as the debt, and again as the lawsuit.  Taxes can be reported and may even show as a tax lien on your credit. All of these “actions” will help to bring down your credit score.

So how do you repair your credit? Well,  you don’t. If something is being reported in error, then you can dispute the validity of the claim and have it removed. (Corrected. Not repaired.) I know. Symantics…..but still.

But be not dismayed, all is not lost. It is possible to have actual bad debts removed from your credit report. The simplest way is to simply let it expire. A general rule of thumb is that bad debt stops being reported after 7 years and actions(such as judgments and bankruptcies) after 10 years. But in some cases, such as a judgment, the judgment can be renewed for another 10 years. Several other things can reset the statute of limitations and keep bad debts on your credit report for a long…long…long time.

If you don’t feel like waiting around for a decade or two, it is possible to simply ask a creditor to remove the bad debt from your credit report. What?!?! It’s true. You can write or call a creditor and give them an explanation and if you can convince them, they can just remove the debt. Believe it or not, there is no law that requires a creditor to report your bad debt. But most creditors seem to have nothing better to do than destroy your good name. So, give them a call, give them a real good sob story and have them remove it. Good luck! Let me know how that works out for you.

Another technique is to file a dispute with the reporting agency. A creditor must provide evidence of the debt within an alloted time after a dispute is filed. If they cannot provide the evidence, the debt is removed. And since in many cases, the debt has been sold and resold from collection agency to collection agency, many times the original paperwork has long been lost. So feel free to exploit the incompetency of your creditors and dispute those debts. And to make that real easy for you, here is a sample dispute letter provided by the FTC website.

While the preceeding may be considered as “cleaning” your credit report, and in fact, these options do exist (on paper) they are unlikely to work out in your favor. So, while “cleaning” your report may technically be possible, it is very unlikely.

After you have corrected and …um….”cleaned” your report, it is wise to stay on top of your credit reports and review them regularly. Avoid companies that promise “free” credit reports, even if they do have a snazzy jingle sung by a hipster rock band. You will end up getting signed up for a  credit monitoring service that charges a monthly fee. Why pay someone for something that you are able to get yourself for free? Go to http://www.annualcreditreport.com/ and you can run all three reports free of charge. It is easy and fun! Okay, maybe not fun, but it is easy. You can run just one or run all three. I typically will run transunion, then four months later, I will run equifax, then four months later I wil run experian. This way I get a free credit report once every four months. It is not uncommon to find a debt on my credit that does not belong to me.

So, get your credit report corrected and accurate. Review them regularly for errors, and feel free to attempt to “clean” your credit report. Your future….and your very life depends on it! Okay, maybe that was a little overdramatic, but you get the point.

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