Having bad credit is usually the result of a long list of poor choices or unfortunate situations that a consumer has faced. It is not the result of a single bill or debt that went unpaid but more a long history of late payments, missed payments or charge-offs. As these issues mount on your credit report, your credit score begins to drop.
As a result of a lower credit score, you will find that you are forced to pay higher interest rates on loans and credit cards, your insurance premiums are higher and it might even be difficult to get cell phone contract. If this is happening to you, the first thing that you need to do is check your credit score. You are entitled to one free credit report each year from each of the three credit reporting agencies.
You want to look at more than just the score that they are assigning to you. You also want to look at all of the information to make sure that it is accurate. The good news is that if there are errors, then you have the ability to fix them. In order to correct the mistakes, you will want to research how does credit repair work.
What is Credit Repair?
Credit repair is not some magic service that fixes all of your past financial mistakes, but it does fix mistakes that have been made by lenders or credit agencies when gathering data about your credit history. Credit repair is the process of correcting these mistakes as well as other items such as a debt from more than seven years ago which has not fallen off of your report or a single debt that is repeated several times in your credit history and is being viewed as multiple debts. These errors can be corrected to help improve your credit score.
How Does Credit Repair Work?
Credit repair is basically ensuring that all of the information about your credit history conforms to three major legal standards. First, the report must be 100% accurate. Any misinformation will have an impact on your score. Second, the information must be entirely fair. As an example, if you had a late payment to a credit card company three years ago, that item should only be listed once on your credit report. But if that company has mistakenly reported the late payment more than once, then it looks as if you were late on payments more than you actually were. That is considered to be unfair to you. Finally, all items reported to a credit agency must be fully substantiated. This basically means that lenders need to follow a specified process in reporting missed or late payments, the debt must be verified as legitimate and attempts to collect must have been made. This protects consumers from having a random business or even a person reporting fake debt history to a credit agency. When you hire a credit repair service they will work on your behalf to correct any mistakes on your credit report at all three credit reporting agencies.
How Long Does It Take?
Once you and your credit repair service have determined that there are mistakes in your credit history, they will draft letters to the agencies to begin the dispute process. They will also include any documentation that you may be able to provide to help prove the error or to confirm that you did in fact, pay off the debt in question. Canceled checks or statements from the lender showing a zero balance can be helpful in substantiating that the information is incorrect.
By law, credit bureaus must respond and resolve most disputes in 30 days. A few disputes have exceptions but those must be resolved within 45 days. But what is important to remember is that you will not see an immediate jump in your credit score. Each case is unique, so a reputable credit repair service will not even try to tell you a date when you will see your credit score improve, but they can tell you what the past experience of other customers has been. This will give you a rough idea of when you can expect to see a change in your score.
What Should A Reputable Credit Repair Service Want to Know About Me?
Credit repair services are well informed about the laws and standards for credit reporting. In fact, some services are operated as a part of a larger law firm. They know that some credit issues are caused by human error and should not penalize the consumer. They also know that other issues are legitimate and they won’t lie to a customer and claim that they can erase all bad credit information.
What they will want from you is a detailed explanation of your expectations for credit repair and also a detailed account of why you believe that certain items on your credit report are mistakes. Any documentation you can provide will only strengthen your case and make it easier for the service to get a fast resolution to the issue.
Credit repair services are well informed about the laws and standards for credit reporting. In fact, some services are operated as a part of a larger law firm. They know that some credit issues are caused by human error and should not penalize the consumer. They also know that other issues are legitimate and they won’t lie to a customer and claim that they can erase all bad credit information. What they will want from you is a detailed explanation of your expectations for credit repair and also a detailed account of why you believe that certain items on your credit report are mistakes. Any documentation you can provide will only strengthen your case and make it easier for the service to get a fast resolution to the issue.
If It Sounds Too Good To Be True…
Most consumers are pretty good at managing their expectation of a new service or product. So if you sit down with a credit repair service to learn about all that they have to offer, listen to your instinct, even when getting title loans without a job.
If they make a lot of lofty promises such as a completely clean credit report or an increase of 100 points on your credit score almost overnight, believe the red flag that you are seeing. No legitimate firm is going to make unrealistic promises like these.
Also, if they tell you about all of the services that they offer and then say that they would love to have you as a client but you need to make an upfront payment, then they are not a reputable company. The Federal Trade Commission prohibits credit repair services from charging for credit repair services prior to completing the work.
A legitimate company might ask you to sign an agreement or contract stating that you will pay a certain amount once their services have been rendered but they will never ask you to pay in advance. That is against the law.
Credit Repair Is a Real Solution
After looking at your credit score you might have wondered, “Does credit repair work?” or “Can I get car title loans no inspection?” And the answer is pretty easy to understand. If there are true errors in your credit history, then a credit repair service can help you to get those issues resolved. As a result, the negative impact that those issues had on your credit score can be removed.