Credit repair is the process by which a third-party disputes any inaccurate information on your credit reports. They work closely with Experian, Equifax and TransUnion credit bureaus as well as financial companies like banks or debt collectors in order to remove negative items from your report and boost your score.
There are various credit repair services and each offer their own distinct set of features, so it is wise to investigate and compare plans before selecting one that best meets your needs.
Credit repair companies begin by gathering both personal and financial data about you in order to devise an individual strategy plan tailored specifically to your situation, before requesting copies of your credit reports from all three major bureaus.
Credit reporting agencies abide by certain rules and regulations in order to maintain an accurate credit report, including providing you with an opportunity to dispute errors by setting a deadline and time limits before they remove disputed information from your report.
If the credit bureaus miss this deadline, they are required to issue a letter explaining why they did not respond to your dispute and could result in it being removed from your report.
Even with strict deadlines in place, resolving disputes often takes months due to back and forth discussions and numerous factors which may impact their resolution.
Credit repair can be very expensive. In general, you will likely incur both setup fees and monthly maintenance fees from companies offering credit repair. Your costs depend on which services are being offered and their charges. As always, make sure that what you’re getting matches your costs exactly!
Consider these strategies to avoid credit repair scams: Review any history of complaints lodged with the Better Business Bureau and Consumer Financial Protection Bureau against a prospective credit repair service; additionally, conduct an internet search of their name with Google to view reviews by previous customers of that particular firm.
CFPB suggests checking any credit repair company for regulatory actions or lawsuits filed against it before engaging them as this could indicate they’re breaking federal laws.
Check if they offer coaching on how to best manage existing accounts; this is an integral component of credit repair as it will help prevent mistakes that could further harm your score.
Be wary of credit repair companies that advise opening new accounts to boost your score – this practice, known as file segregation, may improve it temporarily but ultimately it could prove damaging to your score in the long run.
Only disputing any inaccurate information that appears on your credit report can truly improve it, and all the resources needed are readily available online and for free. Furthermore, credit bureaus offer forms which allow individuals to dispute any incorrect data that appears in their reports.
