There are a number of companies that promise to help you fix your credit. They claim to remove negative items on your report by disputing them with the credit bureaus.
But these tactics only work if the items are accurate, and it can take months for them to get removed.
Obtaining Your Credit Reports
Credit reports are a vital tool for lenders and other businesses to check your credit before making loans or other financial decisions. They contain your personal information, credit history and current debts, as well as public records about where you live and work.
A credit report can affect the interest rates you pay on new loans and mortgages, your application for employment, and whether or not landlords will rent to you. It also can indicate whether or not you’ve been involved in any type of lawsuit or bankruptcy, and can provide information about your credit score and other risk factors.
Many credit repair companies can help you with this process. They will pull your credit reports from all three major credit bureaus and then set a plan to dispute inaccurate items on your report. They will then negotiate with creditors to have them removed from your report.
The key is to dispute as much of your negative information as possible in order to improve your score. It’s also important to keep in mind that even if a negative item is deleted from your report, it won’t necessarily raise your credit score by itself.
You should regularly review your credit report and score. This will help you spot errors and mistakes on your credit report before they hurt your scores. If you notice something that looks suspicious, you can request a free copy of your credit report from each of the three nationwide credit reporting agencies.
Your right to receive a free credit report is protected under federal law. You can get one at no cost if you are denied credit, insurance or employment in the past 60 days, if you believe that your credit report contains inaccurate or outdated information, or if you are a victim of identity theft.
In addition to these rights, you can also dispute information on your credit report yourself. All of the major credit bureaus offer dispute forms and instructions for you to file. You should submit a dispute with the details of the incorrect or outdated item, as well as any documentation you have that supports your claim.
Identifying Negative Items
Negative items can make it difficult to get the credit you want or qualify for the best interest rates. These include late payments, collections, charge-offs and bankruptcy. Some negative items such as foreclosures remain on your credit report for seven years or more, although many will drop off in ten years or less.
In order to avoid these negative items, it is important to know how to identify them on your credit repair report. This will help you dispute them sooner so that they don’t have a negative impact on your credit history and score.
To do this, you will need to get a copy of your credit report from all three nationwide credit reporting agencies (TransUnion, Experian and Equifax) and review it carefully. This will allow you to spot any inaccurate information and contact the agency to dispute it.
When you dispute an item, the credit bureau must investigate the item within 30 days of receiving it. If they can’t find any evidence that the item is accurate, it will be deleted from your credit report.
Most negative items will fall off of your credit report after seven years or less, but some penalties can stick around for a longer time, such as a completed chapter 7 bankruptcy. If you’re able to get these negative items off your credit reports, they will have a smaller impact on your credit score and may even increase it if the items were incorrect or caused by identity theft.
For example, you can negotiate with a collection agency to remove the account if you pay them a settlement. Similarly, you can negotiate with a lender to remove a delinquent account if you make regular payments on it.
Some companies also use a technique called pay-for-delete to attempt to remove accurate negative items from your credit report. Generally, this will only work on erroneous negative items and isn’t worth the effort.
Those who try to sell this service often overpromise, make claims that are “too good to be true” and ask for payment before they do any work. They can also file false police reports or claim that the negative items on your credit report are the result of identity theft, which is illegal and doesn’t help you improve your credit score.
If you have identified errors on your credit repair report, disputing them with the credit bureaus is an important step. In most cases, disputed items can be removed from your credit report and have a positive impact on your credit score.
While disputing mistakes can be time-consuming and complicated, it’s often worth the effort if it means you get your credit score back on track. Besides, the process can also help you avoid future errors that may cause your credit scores to plummet.
Disputes can be submitted by mail or online. The credit bureau should have a dispute form available, so you can fill out it and send it to them along with copies of documents that support your position.
Keep a record of everything you send. If you mail your dispute, be sure to send it by certified mail and ask for a return receipt so you can track whether the credit bureau got it.
Once you’ve filed your dispute, the credit bureaus have 30 days to investigate it and respond. During that time, the items being disputed will not be included in your credit score and a notice will appear under each item on your credit report.
You can dispute information on your credit reports with each of the three major credit bureaus (Experian, Equifax and Transunion) or with the data furnisher that provided the information. A data furnisher is a financial institution, such as a lender or credit card company, that provides the information to credit reporting companies.
If the credit bureaus find that the information you’re disputing is inaccurate, they’ll update your credit file to show that it’s been changed or deleted. In addition, they’ll notify all of the credit reporting companies that have received the incorrect information.
In most cases, removing inaccurate negative items can boost your credit score and increase your approval odds for various types of loans or lines of credit. However, in some instances, it may revive old debt accounts that have new activity and lower your score temporarily.
It’s always a good idea to check your credit reports at least once a year. That way, you can check for any errors that popped up after you disputed them and resolve them before they negatively affect your score.
In the credit repair business, a successful score increase requires a well-rounded approach. This includes a focus on the most important items and a commitment to the long game. The right combination of tactics and discipline may yield a significant boost to your credit rating, but it will take time and effort.
The most important credit repair activity entails checking your three main credit reporting agencies (Experian, Equifax and TransUnion) for any errors that might impact your scores. Then, you need to dispute any information that is incorrect, outdated or unverifiable. The Fair Credit Reporting Act mandates that you must do so within 30 days of receiving the incorrectly reported information. The law also requires that the credit bureau send you a summary of its findings and an explanation of your rights if any further action is needed.
Getting a better understanding of the credit repair process and how it works will help you make better decisions when it comes to your credit. Ultimately, you can save a bundle by tackling your own credit issues instead of hiring a shoddy credit repair service. If you have any questions, contact the CFPB or your local consumer protection agency. They are more than happy to assist you in determining whether or not credit repair is right for you.