A credit repair company may promise to remove a hard query from your credit history for a fee, but inquiries can only be eliminated if they are the result of fraud. Instead of paying a company to do it for you, you can dispute a fraudulent consultation yourself for free. 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.
It will also have a negative impact on your chances of obtaining new lines of credit or loans for several years until your credit history improves substantially. Monitors credit scores from all three reporting agencies in real time, alerts you if someone applies for credit under your name, and offers personalized tips to improve your score. As with other credit repair letters, examples of goodwill cancellation request letters are available on the Internet for free. You can review more information on how to select the right reputable credit counselor for you from the National Foundation for Credit Counseling.
However, there are steps you can take to start building a more positive credit history and improve your credit scores over time. 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. You can start credit repair yourself at no expense, although you will have to spend some time on the process. Under federal law, you are entitled to get a free credit report from the three major credit bureaus (Equifax, Experian and TransUnion) once a year.
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. If you don't see that the credit report error has been removed or corrected after two months, follow up with the credit reporting company. If the credit reporting agency believes your dispute is valid, the information will be removed from your credit report and your rating will reflect that change as soon as it is recalculated. If the credit counselor negotiates liquidated amounts that mean you pay your creditors less than you were originally owed, your credit score could be affected.
Credit repair services can help you dispute inaccurate negative information and manage negotiations with creditors. Credit counselors can also help you develop a debt management plan (DMP) with unsecured debt, such as credit cards. Not only can closing scores hurt by eliminating that available credit and increasing your credit utilization ratio, but keeping paid accounts open can also be an advantage because they are old accounts that are in good standing (paid). Since you're going to do it alone, you'll need to do the record-keeping and tracking disputes that a credit repair service would have done for you.