Credit repair is the practice of helping individuals rectify any discrepancies on their credit reports, which are an all too frequent problem and have an adverse impact on your score. Many opt to hire credit repair companies but doing it yourself is possible and free. Knowing what steps are needed and which should be avoided will lead you closer to success in credit repair.
As part of your credit repair effort, the first step should be obtaining copies of your reports from all three national credit bureaus – Equifax, Experian and TransUnion. Each agency maintains its own version of your report; there may even be discrepancies among them. Once you receive these reports, review them closely for errors. Any inaccurate information should be challenged by writing directly to each bureau with your request that it be corrected – once submitted they should investigate and respond within 30 (or sometimes 45 days if applicable) days; otherwise they must remove it altogether from your report
Legitimate credit repair companies begin by reviewing a consumer’s credit report to identify any inaccurate items, and work to contact the credit bureaus and data furnishers so that any incorrect data can be corrected. They may also suggest ways to improve one’s own credit. But according to the Federal Trade Commission, nothing a credit repair company can offer that you couldn’t do yourself for free.
While disputing errors on your credit report can help, another effective strategy for improving it would be paying down any past-due accounts and increasing overall credit history. Each time you apply for new credit, however, creditors will run hard credit checks that can temporarily lower your score by one to five points; as a result, only apply when necessary!
Note that credit repair companies do not provide services you cannot do yourself and some even make false or misleading claims about what they can accomplish. Therefore, before hiring any credit repair service it’s vitally important to conduct extensive research on them and look out for any red flags like upfront fees being charged or results that appear too good to be true.
If you decide to hire a credit repair service, ensure the service is legal and follows Federal Trade Commission rules regarding credit repair companies. Remember there’s no quick solution when it comes to improving your credit; it will take time and effort. Ideally if you find yourself needing credit repair, consulting with an experienced professional is best; these professionals will likely be willing to answer all of your questions regarding the process as well as explain various laws that regulate credit reporting such as the Fair Credit Reporting Act and Consumer Financial Protection Bureau rules on how creditors must treat you when creditors contact them directly.
