Credit repair is the process of disputing any inaccurate information that appears on your credit report. Credit repair companies typically begin by obtaining current copies from all three credit reporting agencies (Experian, Equifax and TransUnion) before reviewing each one to identify errors and work towards correcting them.
Consumers seeking credit repair often look to improve their scores to qualify for new loans and credit cards such as mortgages or auto loans, or reduce interest rates that could save them money over time. A strong credit score can also help secure jobs and housing as employers often conduct soft credit checks to assess your eligibility for employment or housing applications.
Before hiring a credit repair service, you must grant it limited power of attorney. Once signed, the agency will contact credit ratings bureaus and furnishers on your behalf in order to challenge any questionable entries on your report, using strategies like debt validation services, pay-for-delete services and goodwill letters as needed to remove negative information from your report.
Most credit repair companies also provide their clients with free or low-cost credit monitoring through one of the three major bureaus, providing alerts when changes in your score occur. Some even provide you with a detailed breakdown of what factors are impacting their scores allowing them to identify which areas need improvement and monitor them accordingly.
Credit repair services typically help consumers remove inaccurate information from their credit reports within 30 days of sending in their dispute letter to a bureau; however, if it deems your dispute frivolous or lacking sufficient evidence it will stop investigating and leave it on your report.
Rebuilding credit requires time and careful use to achieve real results. Even once you’ve repaired your score, be mindful in how you use credit in the future to maintain those gains.
Before selecting a credit repair company, it is vitally important to do your homework. The Federal Trade Commission has taken action against several such firms that violate consumer protection laws. Read reviews carefully, and select a reputable credit repair service with an offer of solid money-back guarantees and comprehensive services. Keep in mind that there’s nothing a credit repair company can do that you cannot accomplish yourself by exerting effort. There’s an abundance of online information that will teach you how to repair your own credit and how to avoid making costly mistakes when working alone. Credit repair is an ongoing process and for best results take charge of their repairs themselves; although this may seem tedious or time consuming at times it will certainly pay off in the end.
