CREDIT REPAIR
Make the complex, simpler from credit repair to financial education and pricing, our goal is to help with your unique needs. Credit Repair made easy our services help to fix your credit report. We have helped people take control of their financial lives from across the country.
What is credit repair?
Credit repair refers to the process of disputing mistakes and errors on your credit reports. Each credit bureau (Equifax, TransUnion, and Experian) maintains its own proprietary version of your credit report. The credit bureaus strive to maintain accurate information, but errors can occur.
Credit repair is the process you use to try and correct those errors. The Fair Credit Reporting Act (FCRA) lets you submit a dispute whenever you disagree with any information that appears on your credit report. If the information cannot be verified as accurate within 30 days (occasionally 45 days), the credit bureau must remove the item you disputed.
How Credit Repair Works
Though numerous companies claim they can clean up bad credit reports, correcting erroneous information that may appear on credit reports takes time and effort. The details cited to credit reporting agencies cannot be removed by a third party. Rather the details, if misrepresented or inaccurate, can be disputed. Credit repair companies may investigate such information, but so can the individual the report is assessing. Individuals are entitled to free credit reports every 12 months from credit reporting agencies, as well as when an adverse action is taken against them, such as being denied credit based on information in the report.
Disputes may be filed when incomplete or inaccurate information appears on their credit reports. Aside from correcting such information, or catching fraudulent transactions on one’s credit, rebuilding and repairing credit can rest more heavily on credit usage and credit activity.
The payment history of the individual can be a significant factor on their credit standing. Taking steps to make sure payments are up to date or improve the payment schedule for outstanding credit can beneficially affect their credit score. Furthermore, the amount of credit used by the individual can also play a role. For instance, if an individual is actively using large portions of the credit available to them, even if they are maintaining minimum payments on time, the size of the debt they are carrying can negatively affect their credit rating. The issue is that their liquidity may be pressured by the overall debt against them. By taking measures to reduce their overall debt load, they may see improvements to their credit profile.
What does credit repair do?
Credit repair allows you the chance to dispute and then correct inaccurate negative items on your credit reports that could be hurting your credit scores. If you’ve been working to get out of debt, there is a wide range of errors it can potentially create.
- Missed payments that you made on time, which could happen when you arrange a repayment plan with reduced payments.
- Incorrect account statuses, such as an account reflected as “Settled in Full” instead of “Paid in Full.”
- Outdated information, since negative accounts can only remain on your credit report for a set period.
- Re-aging, which occurs when a debt collector or creditor changes the “purge-from” date of an account and causes it to remain on your report longer than it should.
Credit repair does not give you a way of removing negative information that’s accurate and verifiable. It isn’t a magic bullet that can guarantee you a clean credit report with no negative items. If a negative item can be verified by the creditor or lender, then credit repair can’t help you remove it.
But mistakes and errors happen in credit reporting. In fact, they happen more often than you might think, especially when you face challenges with debt.
How to Repair Your Credit
There are a few different ways to repair your credit. Which path you choose depends on:
- Your budget – i.e. how much you can afford to pay
- Your confidence level in making disputes on your own
- The number of negative items you want to dispute
The more items that you wish to dispute, the more you may potentially boost credit score. If you have a range of items to dispute, it may be worth it to spend money on a professional credit repair service. In the long-run, the money you save by securing lower interest rates with a better score may justify a little money spent upfront.
However, it is possible to repair your credit on your own for free. That’s also part of the rights protected under the Fair Credit Reporting Act. You can also find paid credit monitoring tools that help you make disputes on your own. This type of tool generally costs less than a paid repair service.
Still, whether you use the free credit repair process or work with a company, the steps in the repair process are basically the same.
- Obtain your credit reports from each of the three credit bureaus.
- Review your reports to identify potential errors and mistakes.
- Dispute any items you find, either with the credit bureau that issued the report or with the credit issuer that furnished the information.
- Wait 30-45 days while the credit bureau or issuer attempts to verify the information.
- If the information can’t be verified, then it must be removed.
- You will receive a free copy of your credit report, so you can confirm the information was removed.
How do repair services work?
If you have a range of disputes to make or if you feel the disputes you need to make aren’t exactly straightforward, you may want to use a professional credit repair service. You may be more likely to get the results you want and it’s often less hassle. Just like people opt to hire professionals to manage their retirement funds or to buy or sell their home, professional credit repair could make the process easier on you.
- You find a reputable credit repair company. It’s is recommended that the company have an attorney licensed in your state on staff in case any legal issues arise and some states may require companies to have a state-licensed attorney, depending on where you live.
- You authorize the credit repair company to pull your credit reports and make disputes on your behalf. This usually comes with a setup fee of around $15-$20.
- The credit repair company has their team review your reports, then they work with you to gather any necessary documentation.
- They make disputes on your behalf and keep you updated on the progress. There is usually a monthly fee that ranges from $80-$120 per month.
- Once all disputes have been closed, they provide a free copy of your credit report so you can review it.
How much does credit repair cost?
Ultimately, credit repair companies communicate on your behalf either with the credit bureaus or with the companies that reported or “furnished” your credit information to the bureaus. These data furnishers are almost always debt collectors or financial services companies, like banks and credit card issuers.
The intent is to have the credit bureaus or furnishers either delete the credit information altogether or modify it in some way that’s more favorable to the consumer. Communications by credit repair companies can happen via the internet, phone or U.S. mail. The U.S. mail has historically been the method that’s preferred by credit repair companies for several reasons.
Mailing a few letters to the credit bureaus might sound unsophisticated, but it’s the approach that works with how credit repair companies tend to operate. Some credit repair companies employ a process called “jamming,” which involves sending repetitive and often frivolous letters to the credit bureaus and their data furnishers.
The theory is if a credit repair company can send a large volume of dispute letters challenging the same item over and over, that somewhere along the way either a credit bureau, lender or debt collector will fail to process the dispute within the 30-day period specified by the Fair Credit Reporting Act (FCRA), resulting in the account being deleted.
What Is a Credit Score?
A credit score is a number between 300–850 that depicts a consumer’s creditworthiness. The higher the score, the better a borrower looks to potential lenders. A credit score is based on credit history: number of open accounts, total levels of debt, and repayment history, and other factors. Lenders use credit scores to evaluate the probability that an individual will repay loans in a timely manner.
How Credit Scores Work
A credit score can significantly affect your financial life. It plays a key role in a lender’s decision to offer you credit. People with credit scores below 640, for example, are generally considered to be subprime borrowers. Lending institutions often charge interest on subprime mortgages at a rate higher than a conventional mortgage in order to compensate themselves for carrying more risk. They may also require a shorter repayment term or a co-signer for borrowers with a low credit score.
Conversely, a credit score of 700 or above is generally considered good and may result in a borrower receiving a lower interest rate, which results in their paying less money in interest over the life of the loan. Scores greater than 800 are considered excellent. While every creditor defines its own ranges for credit scores, the average FICO score range is often used.
- Excellent: 800 to 850
- Very Good: 740 to 799
- Good: 670 to 739
- Fair: 580 to 669
- Poor: 300 to 579
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