Legitimate credit repair companies can ensure that inaccurate information is removed from your credit reports so that it doesn't hurt your credit rating. However, they can't do anything for you that you can't do for you if you're willing to put in time and effort. Unfortunately, none of those promises are true. Credit Repair Companies Offer to “Fix Your Credit by Eliminating Negative Elements from Your Credit Report”.
They offer to file disputes about negative items on your behalf with credit bureaus and have them removed. What is the problem with this approach? The whole strategy is based on taking advantage of a legal loophole in the credit system. When accurate items are removed, it is only temporary a few months at most. Having a good credit score is important.
Without it, you may be denied low-interest loans and lines of credit, a job, a rent, and even an insurance policy. If your credit report shows a history of debt problems or contains errors, you may consider using a repair service to “clean up” it. However, before you pay, know how these companies work. In the vast majority of cases, hiring an external company will only waste your money.
Some positive accounts are actually helping your credit score, and disputing them could cause your credit score to drop. Bankruptcy won't improve your credit, and in some cases, your credit may worsen after you file for bankruptcy. With a positive title like “credit repair”, it's no wonder people fall prey to fraudulent practices by credit repair companies. Consumers who take the time to write their own dispute letter may also see better results compared to what they can get when a credit repair company sends a generic letter on their behalf.
For example, it is possible to dispute negative information on your credit report through all three credit reporting agencies. Typically, these companies offer to review your credit reports and address any negative elements they can with credit bureaus on your behalf. Credit counseling agencies offer a more holistic approach to solving your money and credit problems, focusing most of their efforts on helping you budget, better manage money and reduce expenses. You probably already know how important your credit score is and how this three-digit manifestation of your credit status can affect your life.
If you have had credit difficulties in the past, how long it will take to recover depends in part on the seriousness of the negative information on your credit report and how long ago it occurred. There is nothing a credit repair service can legally do for you, including removing incorrect information that you can't do for yourself for little or no expense. When that happens, the credit repair company takes action, calling on the consumer to announce that the item was recalled and suggesting that the consumer pay more each month to “keep up the momentum and go after the rest. There are legitimate companies that provide credit repair services, but the field is also known for scams, so it's important to investigate any company you are considering hiring.
The Credit Repair Organizations Act requires companies to provide you with a firm total of costs and an estimate of how long it will take to get results. However, for the process to work, you must work together with your credit repair agency to make the necessary changes, such as paying your debts and paying your bills on time. Once you have the EIN, you will be prompted to apply for a new credit with it, so you can create a whole new credit history. CROA Adds Transparency and Due Diligence to Credit Repair Process, Making Consumers Less Likely to Be Leveraged.