The term credit repair involves fixing a bad score through the process of filing a written dispute with the credit bureaus, either online or by mail, in an attempt to have negative information removed from the file. The dispute should present a detailed explanation what the error is along with any supporting documents. While this can be an effective technique to improve your credit score, it can be a very time-consuming process that can take weeks, or even months, that most people don’t have time for.
Credit Repair Services
For people who don’t have the time or desire, to do the work themselves, hiring a credit-repair service to challenge errors on their behalf can be an effective strategy. Additionally, a reputable credit-repair service can help consumers with issues they may not be able to rectify themselves.It is common for a company that holds a debt against a consumer to sell off the debt to a third party. If this happens multiple times it can show up on a credit report more than once. While the debt may be valid, having the same debt showing up on a credit report multiple times can really damage a credit score. Here a credit repair service may be able to get the issues resolved by getting the extra entries removed.
What Credit Repair Services Do
There are laws dictating consumer rights, such as the Fair Credit Reporting Act, the Fair Credit Billing Act, the Fair Debt Collection Practices Act, and others. Good credit repair companies will have a comprehensive understanding of all current laws and the credit bureaus must abide by these laws and remove inaccurate information from a credit file. A study done by the Federal Trade Commission found one in every five consumers have errors on at least one of their three major credit reports.Additionally, there are often errors on one report that are not on the other two. Once errors are identified, a credit-repair company will address the issues with the credit-reporting agency. Once the bureaus receive the dispute they work with the credit-repair company to see if the disputed item should be removed from the report.
Timeline for Removing Inaccuracies
Having inaccurate information taken off of a credit report is typically the quickest ways to improve a credit score. The credit bureaus must respond, and resolve, a dispute within 30 to 45 days. And this can really help consumers trying to make a major purchase, like a house or new car. However, that doesn’t mean a credit-repair service will be able to promise how quickly they can improve your credit score, as each case can have numerous variables.
Selecting a Credit Repair Company
The Federal Trade Commission prohibits credit repair companies from charging consumers before credit repair work has been completed. Provided consumers don’t pay a credit-repair service upfront, they typically have nothing to lose.Any good credit-repair company will know exactly what they are able to do, and what they aren’t able to do, to improve your credit score. Here are the things consumers should look for in a good credit-repair company:
- A reputable credit-repair company will explain all the consumer credit rights and answer any questions about those rights
- The company will want to know all the details surrounding the consumer’s credit issues
- The company will take the time to explain in detail the steps they will take, and how they will do it, in representing you to the credit bureaus